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Pulte Corporation
Nov 06, 2011
Mortgage Interest Deduction
- economists
- tax
- MID
- Louisiana
- NAR
- home
- economist
- NAHB
- witness
- National Association of Realtors
- corporation
- housing
- representatives
- Mortgage Interest Deduction
- witnesses
- economy
- Senate Finance Committee
- homes
- community
- representative
- communities
- National Association of Home Builders
- Pulte Corporation
- credit
- Senator John Breaux
The National Association of Realtors (NAR) sent witnesses to the Senate Finance Committee after submitting a written report in defense of the MID (Mortgage Interest Deduction) for tax payers. These witnesses cited the real estate market, the housing surplus, and the economy as reasons why the Mortgage Interest Deduction should not be "touched" at this time. Five witnesses testified - including representatives from Pulte Corporation, the National Association of Home Builder (NAHB), Senator John Breaux from Louisiana, and 2 academic economists.
MID: Witnesses Say No Cuts Now
On October 6, 2011, the Senate Finance Committee held another in a series of hearings on tax reform, this time focusing on housing incentives. Five witnesses testified from a variety of perspectives, but they were unanimous on one point: Now is not the time to make any changes to the mortgage interest deduction (MID). Witnesses included representatives from the Pulte Corporation (housing construction), the National Association of Home Builders (NAHB), retired Senator John Breaux (D-LA) and two academic economists.
Senator Breaux advocated the approach that had been taken by the 2005 Bush Tax Reform Panel, recommending that the MID be gradually converted from a deduction to a 15% tax credit. Pulte and NAHB delivered the same message that NAR provided in a written statement: housing changes should be retained intact. Both economists believed that the MID should be reduced at some future time, but not presently. All five witnesses emphasized that the market is far too fragile and that any changes to housing incentives, especially MID, would cause greater instability and price declines.
Almost all of the discussion during the Q&A period was about MID. A few references were made to second homes, but the witnesses emphasized that changes to MID for second homes would have serious jobs and revenue impact on second homes communities. NAR and NAHB noted the importance of the $250,000/$500,000 exclusion in written comments, but no Senator made any inquiry related to it.
Read NAR's press release following the hearing and NAR's written submission.
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