NAHB Ready to Protect Any Challenges to Tax Incentives for Housing - 11/29/2004 - Insurance Lawyers Taxes

NAHB Stands Ready to Protect Any Challenges to Tax Incentives for Housing

In a press conference shortly after his re-election in November, President Bush said that tax simplification and Social Security reform would be top priorities during his second term. The President also indicated that no specific decisions had been made on proposed changes to the tax code and that he considered tax incentives for homeownership and charitable contributions to be important.

The President’s remarks sparked a flurry of speculation in the media that the Administration might be considering everything from doing away with the mortgage interest deduction and state and local tax deductions to scrapping the current system in favor of a new structure based on either a flat tax or national sales tax.

The fact is, no plan has yet to emerge and lawmakers and policy experts are still working to determine what is feasible. The process is expected to be slow and deliberate, and it is anticipated that early next year the White House will appoint a blue-ribbon commission to tackle this issue.

In all likelihood, the panel will take six months to report its findings, and this will be followed by several months of congressional hearings, with a viable legislative proposal to follow some time in 2006.

Meanwhile, on the issue of the mortgage interest deduction, President Bush provided a significant measure of assurance in his Oct. 2 address to the NAHB Board of Directors in Columbus, OH, during the final weeks of the presidential campaign.

The President said: “I believe that the mortgage interest deduction enables more Americans to achieve the goal of homeownership. It is an important part of our tax code.”

To further put this matter in perspective, in previous Administrations and congressional sessions, the topic of tax reform has been a prevalent issue. But due to the complexities of the tax code and the myriad competing business and consumer interests, little changes other than minor modifications around the edges have occurred.

The few major changes that have been enacted took several years to put in place.

For example, proposals for the Tax Reform Act of 1986 first began circulating in 1981.

Just as in 2003, when NAHB worked with the Administration to implement a major tax cut package that allayed concerns over the Low Income Housing Tax Credit, NAHB stands ready once again to bring its expertise and political clout to the table to represent the interests of the housing community.

As this process moves forward in the new Congress, NAHB will work to protect current tax incentives that will spur homeownership and rental housing initiatives.