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.
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.
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.