On Wednesday, September 27, 2017 the “Group of Six” consisting of Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell, Speaker of the House Paul Ryan, Senate Finance Committee Chairman Orrin Hatch, House Ways and Means Committee Chairman Kevin Brady and National Economic Council Director Gary Cohn will release a broad tax reform outline.
The plan is expected to double the standard deduction and eliminate all personal deductions except the Mortgage Interest Deduction and the deduction for Charitable Contributions. The plan eliminates the deduction for State and Local Taxes. This one-two punch will deliver a crippling blow to middle class homeowners by removing economic incentives for homeownership and raising taxes by an average of $851. By doubling the standard deduction, the Mortgage Interest Deduction would only be available to the top 5% of taxpayers.
NAR’s concern is that a higher standard deduction, even if nearly doubled, would sap the incentive effect of the current tax benefits of homeownership. Essentially, owning and renting a home would be treated the same under the tax law for most people. Moreover, because the plan is also expected to repeal personal and dependency exemptions, the higher standard deduction would leave homeowners owing more tax than under the current law.
On Tuesday, 9/25, NAR launched Public Issue Advocacy plan to highlight NAR opposition to any proposal that results in higher taxes on middle class homeowners.