Replace All Federal Taxes on Income with the Fair Tax Act , HR 25
Mortgage Interest Deduction
The National Association of Realtors will fight against any tax reform that removes the Mortgage Interest Deduction (MID). I researched quickly and found a article (4/25/06)from them explaining the deduction and how they oppose any attempts to take that away.
http://www.realestateestespark.com/pdf/buyer/Mortgage_Interest_Dedu...
I read the article and easily I could see talking points to our favor. On fairtax.org, you can see a few explanations and some very enlightening reports on this subject. But there are wikepedia articles that seem to support the FairTax with the exception of the effect on housing.
http://en.wikipedia.org/wiki/FairTax
Wednesday, the housing data was released for April which of course my curiosity had me calculate exactly the percentage of families in April who will use the MID and how that compares to the FairTax.
April 2009 total houses sold were 5,067,000.
92.8% were existing houses (which would not be taxed under the Fair Tax by the way).
7.2% were new houses. (we already knew this ratio was heavy on existing homes anyway)
So, using the article FROM the NAR, I see that 33% of those families will itemize on their taxes (1,672,110). We see that according to the NAR that only 60% of those will utilize the MID when they itemize (1,003,266).
So the NAR data says that only 19.8% of the families who bought homes in April will get any benefit from the Mortgage Interest Deduction! So why do they insist on fighting against the Fair Tax! They should support it. With the Fair Tax, families would be paying for their home (both principle and interest) with Pre-Tax dollars. They would have greater buying power in order to make the purchase and it means a 100% mortgage interest deduction (and they do not have to do anything to get it).
It just is too obvious that 100% of the families would have benefited under the Fair Tax compared to 19.8%!
I guess the added buying power provided by the FT will not sell more houses than the fact that all WILL have mortgages but only a few will get a SMALL % back from the interest paid in with the MID (but only on the income tax, not the payroll tax)!
I just don't get it! How do we get the Realtors to understand? How do we get that point across to our congress reps? 19.8% vs. 100% makes a strong statement.
http://www.realestateestespark.com/pdf/buyer/Mortgage_Interest_Dedu...
I read the article and easily I could see talking points to our favor. On fairtax.org, you can see a few explanations and some very enlightening reports on this subject. But there are wikepedia articles that seem to support the FairTax with the exception of the effect on housing.
http://en.wikipedia.org/wiki/FairTax
Wednesday, the housing data was released for April which of course my curiosity had me calculate exactly the percentage of families in April who will use the MID and how that compares to the FairTax.
April 2009 total houses sold were 5,067,000.
92.8% were existing houses (which would not be taxed under the Fair Tax by the way).
7.2% were new houses. (we already knew this ratio was heavy on existing homes anyway)
So, using the article FROM the NAR, I see that 33% of those families will itemize on their taxes (1,672,110). We see that according to the NAR that only 60% of those will utilize the MID when they itemize (1,003,266).
So the NAR data says that only 19.8% of the families who bought homes in April will get any benefit from the Mortgage Interest Deduction! So why do they insist on fighting against the Fair Tax! They should support it. With the Fair Tax, families would be paying for their home (both principle and interest) with Pre-Tax dollars. They would have greater buying power in order to make the purchase and it means a 100% mortgage interest deduction (and they do not have to do anything to get it).
It just is too obvious that 100% of the families would have benefited under the Fair Tax compared to 19.8%!
I guess the added buying power provided by the FT will not sell more houses than the fact that all WILL have mortgages but only a few will get a SMALL % back from the interest paid in with the MID (but only on the income tax, not the payroll tax)!
I just don't get it! How do we get the Realtors to understand? How do we get that point across to our congress reps? 19.8% vs. 100% makes a strong statement.
Replies to This Discussion
-
Permalink Reply by David Nelson on
-
As a former Realtor, I can tell you that it is mostly perception. Just like most national organizations, NAR is filled with political types who want to maintain the power they have. The real impetus behind NAR fighting to keep the mortgage interest deduction is because the mortgage industry needs it to maintain their level of operation and a healthy mortgage industry means a healthier real estate market.
-
-
Permalink Reply by Jeff G on
-
Randy, I'm not sure that they're looking at or care about the real cost. It doesn't matter if the home is easier to afford under the FairTax, as it's not preferred to other forms of consumption. The FairTax removes the social engineering that makes housing more favorable. Since several areas would be tax free under the FairTax plan, it could decrease the social incentive to spend more on homes in favor of savings, education, or other investments. Like any special interest group, I think they're worried about loosing a tax advantage that benefits their industry compared to other industries. They could care less about the home buyer.
-
-
Permalink Reply by Randy Stone on
-
Jeff, I agree with you on that. I had told a friend of mine that they have a tax advantage that no other industry has and THAT is the real reason they fight any changes. Over the years many have lost that tax incentive and the Mortgage Interest Deduction is the only one left, (for consumers anyway).
-
-
Permalink Reply by Dennis Wall on
-
I agree also, but my argument to the NAR is this: The mortgage interest deduction is only a fraction of the savings in buying a home that the Fairtax would be. The citizen would have more money to pay to the principle each month therefore saving a ton of money on interest.
-
-
Permalink Reply by David Shipp on
-
It is this kind of misconception that we have to keep fighting. You have done a great job of exposing the truth. Some don't really care about fixing the economy or any other benefits, only about what they perceive affects their own pocket book.
-
© 2024 Created by Marilyn Rickert.
Powered by
