Given a choice of simplifying federal tax laws or retaining current housing incentives, Americans prefer to retain current housing incentives over changing federal tax laws, according to a survey conducted for the National Association of Home Builders.
The survey of 1,001 adults found that about 68 percent of participants “favor retaining deductions for mortgage interest and state and local taxes over a plan to simplify the current tax code,” the home builders’ group reported. The survey was conducted by RT Strategies from Nov. 17-20.
“The survey offers a cautionary note for those in the administration and on Capitol Hill who may be tempted to endorse the recommendations of the President’s Advisory Panel on Federal Tax Reform, which would wipe out popular tax incentives that promote home ownership and affordable housing,” said Jerry Howard, executive vice president and CEO of the National Association of Home Builders.
The White House and Treasury Department have yet to comment on the advisory panel’s proposal, which was presented to the administration on Nov. 1 as part of an overall attempt to overhaul the tax code, the association reported.
The tax panel’s plan calls for replacing the mortgage interest deduction with a more limited 15 percent tax credit. “Also gone would be deductions for state and local taxes (including property taxes) and interest deductions for home equity loans and second homes. It would also eliminate the Low Income Housing Tax Credit, which accounts for the construction of more than 130,000 affordable rental housing units annually,” the association announced.
Commissioned by NAHB to determine the public reaction to revamping the current tax system, the survey found that 79 percent of respondents support federal tax incentives to promote homeownership, and 82 percent believe the government should use the tax code to encourage affordable housing.
“Registered Democratic and Republican voters in all age groups view efforts to tamper with home interest deductibility as a major threat to their retirement security and their ability to pay for their children’s college educations,” said Lance Tarrance, who, along with Thomas Riehle, is a partner of RT Strategies. “For many older home owners, the equity built up in a home also provides an important hedge against unanticipated health care costs.”
About 71 percent of survey respondents oppose the idea of changing the tax code to encourage people to invest more in stocks and bonds and less in the homes that they own. “And that is exactly what the advisory tax panel’s plan would do,” Howard said.
“As we learned in watching the recent California initiative battles, complex proposals tend to lose support, not gain support, as they get more public attention,” said Riehle. “This proposal starts with no real core of supporters.”
The National Association of Home Builders is representing about 220,000 members who are involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction.
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