Posted by: Marvin Remmich | April 14, 2011

NAHB believes Obama deficit plan harms homebuyers

Thursday, April 14th, 2011, 11:52 am

The National Association of Home Builders is not happy with President Obama’s plan to cut the deficit by limiting itemized deductions on homeowner tax filings, including mortgage interest.

President Obama said during his speech Wednesday that “the tax code is also loaded up with spending on things like itemized deductions. And while I agree with the goals of many of these deductions, from homeownership to charitable giving, we can’t ignore the fact that they provide millionaires an average tax break of $75,000 but do nothing for the typical middle-class family that doesn’t itemize. So my budget calls for limiting itemized deductions for the wealthiest 2% of Americans — a reform that would reduce the deficit by $320 billion over 10 years.”

In response to that proposal, Bob Nielsen, chairman of NAHB, said said now is not the time to impose higher taxes on homebuyers when the housing market is struggling to recover.

“The president also suggested that many middle-class taxpayers do not benefit from the itemized deductions. In fact, the middle class is the primary beneficiary of the mortgage interest deduction,” Nielsen said. “The reason most taxpayers itemize is because they are homeowners, so it is not surprising that nearly 70% of the tax benefits associated with this vital tax incentive goes to households earning less than $200,000 a year. Any attempt to chip away at the mortgage interest deduction would represent an attack on middle-class families.”

Republicans also pushed back at the president’s deficit cutting plan. Rep. Jeb Hensarling (R-Texas) said the speech was designed to get the president “through the next election, not to save our country for the next generation.”

“For the first time in two years the president has joined the deficit debate, and what he brings to the table is more job-killing taxes and more rationing of health care,” Hensarling said.

Write to Kerri Panchuk.

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