GOP lead­ers pre­pare to bat­tle with hous­ing in­dus­try

Spe­cial in­ter­est wants pro­posed de­duc­tion scrapped

The Washington Times Daily - - FUNNIES - BY DAVID SHERFINSKI

The spe­cial in­ter­est on­slaught against the GOP’s tax plan has be­gun, with the na­tion’s hous­ing in­dus­try lob­by­ing fever­ishly for Repub­li­cans to scrap their plans to ex­pand the stan­dard de­duc­tion or at least to soften the po­ten­tial blow they say is on the hori­zon for home­own­ers.

Real­tors and home builders say that a big­ger stan­dard de­duc­tion — the crux of the GOP’s ef­forts to cut taxes for the mid­dle class — will be so at­trac­tive that peo­ple will use it and forgo the mort­gage in­ter­est de­duc­tion, which the hous­ing in­dus­try fears will cut into its busi­ness.

It’s just one of the tax poli­cies that are spurring trench war­fare on Capi­tol Hill, where thou­sands of lob­by­ists are work­ing on be­half of the coun­try’s big­gest in­dus­tries to pre­serve their piece of the pie.

The real es­tate fight pits the hous­ing in­dus­try against the deep-pock­eted Koch po­lit­i­cal net­work, which is ac­cus­ing groups, like the Na­tional As­so­ci­a­tion of Real­tors, of jeop­ar­diz­ing broader tax re­form ef­forts with their po­si­tion on the stan­dard de­duc­tion.

“If law­mak­ers cave to this pres­sure and start pick­ing cer­tain pref­er­ences to keep, it could jeop­ar­dize the en­tire ef­fort — and ev­ery­one would lose,” the pro-free mar­ket group Free­dom Part­ners, part of the Koch net­work, says as part of a new ad cam­paign this week.

Real­tors say they sup­port the broader goals of tax re­form if they can be achieved in a “fis­cally re­spon­si­ble” man­ner, said Na­tional As­so­ci­a­tion of Real­tors Pres­i­dent Wil­liam E. Brown.

But Mr. Brown said they want to pro­tect the tax code’s cur­rent in­cen­tives that pro­mote home buy­ing, say­ing that prices will drop oth­er­wise, which he said would amount to an ef­fec­tive tax in­crease on mid­dle-class home­own­ers.

“We will con­tinue to make the case that tax re­form should first do no harm,” Mr. Brown said.

The trade-off comes in the way the real es­tate in­dus­try ex­pects the tax re­form to play out. Repub­li­cans say by dou­bling the stan­dard de­duc­tion, from about $6,000 to $12,000 for in­di­vid­u­als and $24,000 for mar­ried cou­ples, they will de­liver a tax cut to low- and mid­dlein­come in­di­vid­u­als.

But if more peo­ple take the stan­dard de­duc­tion, fewer peo­ple would item­ize, mean­ing they won’t claim spe­cial breaks such as for mort­gage in­ter­est, char­i­ta­ble con­tri­bu­tions or busi­ness ex­penses.

About 30 per­cent of tax­pay­ers cur­rently item­ize.

The Na­tional As­so­ci­a­tion of Home Builders said it sup­ports the GOP’s tax ef­forts but wants to find a way to en­sure in­cen­tives for home buy­ing. One op­tion would be to con­vert the mort­gage in­ter­est de­duc­tion into a new tax credit, said James Tobin, the group’s chief lob­by­ist.

“I’m dis­mayed that they would la­bel NAHB that way,” Mr. Tobin said of the ad cam­paign. “I think that if they talked to any­body on Capi­tol Hill and cer­tainly any­body over here, they’d find that we’re do­ing some of the heav­i­est lift­ing to try to find a path for­ward for tax re­form this year.”

Scott Ol­son, ex­ec­u­tive di­rec­tor of the Com­mu­nity Home Lenders As­so­ci­a­tion, like­wise said Thurs­day the group is not op­posed to tax re­form over­all, but wants to make sure home­own­ers are pro­tected.

“Yes, CHLA is defending the mort­gage in­ter­est de­duc­tion and its pos­i­tive im­pact on home­own­er­ship and home prices,” Mr. Ol­son said in an email. “But no, CHLA is not op­pos­ing ei­ther tax re­form or the in­crease of the stan­dard de­duc­tion.”

House Speaker Paul D. Ryan on Thurs­day said spe­cial in­ter­ests will fight to pro­tect their spe­cific pro­vi­sions in the code, and called on con­ser­va­tives to de­fend the out­lines of the GOP’s cur­rent plan.

“An army of lob­by­ists will come to pro­tect spe­cial in­ter­est pro­vi­sions and to de­rail tax re­form. When it does, we must be able to count on the foot sol­diers of the con­ser­va­tive move­ment to see this through,” Mr. Ryan said in a speech at the Her­itage Foun­da­tion, a con­ser­va­tive think tank.

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