This could be the headline if President Bush gets his way regarding home mortgage interest next week.
Housing prices stand to lose 15 to 20 percent of value if the President’s tax reform panel’s recommendations are passed into law. One industry expert estimated the average homeowner would lose from $25,000 to $30,000 in equity because of these recommendations.
The housing market drives the economy in the United States; to even consider cutting the tax benefits of owning a home could endanger home values. This change the President is proposing would harm middle class families foremost. According to government statistics over 50% percent of American families that claim mortgage interest tax deductions have an annual income from $50,000 and $200,000.
The final recommendation of the advisor panel will be made later next week. They are expected to recommend to the President elimination of the tax deduction. This deduction will be replaced with a meager tax credit. In addition, they will recommend elimination of deductions or credits for second homes, repealing deductions for property taxes, state and municipal taxes, and reducing the exclusion offered when you sell your home.
The recommendations are outrageous. This is quietly happening backstage in the media to the war in Iraq and the Hurricane disasters. The best thing you can do to protect the equity in your home and safeguard your family’s income is to contact your representatives in Congress and let them know how you feel about the President’s plan to rob your home of equity.
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
