NLBMDA Commends Congress for Rejecting Limits on the Mortgage Interest Deduction

From NLBMDA

The National Lumber and Building Material Dealers Association (NLBMDA) commended the members of the House and Senate for rejecting an Obama Administration budget proposal that would have placed limits on the home mortgage interest deduction for higher-income wage earners. Opposition to the change was among the critical main issues NLBMDA members raised with their members of Congress during the association's annual Legislative Conference in March.

As originally proposed, the change, starting in 2011, would have impacted households with adjusted gross incomes of $250,000 and would only allow write-offs at a 28 percent marginal tax bracket rate. For example, someone in the 35 percent bracket that has $20,000 of mortgage interest, property tax and charitable deductions, which are all targeted in the budget proposal, would currently be able to write off 35 percent of the $20,000 -- $7,000. Capped at the 28 percent rate, the write off would shrink to $5,600.

"This proposal could have further depressed the housing market since potential buyers would have had to factor in lower tax benefits, which could have lead to further devaluation of homes and opened the door to further assaults on the mortgage interest deduction," said NLBMDA President and CEO Michael O'Brien.

The House and Senate Budget Committees included specific language in the budget resolution that they were not including the limits in the mortgage interest deduction. However, the issue many not be settled since Congress is still in the early stages of budget negotiations.

"NLBMDA members will need to remain vigilant and continue to contract their members of Congress to assure that this misguided proposal, which could severely dampen any housing recovery, is not enacted," said O'Brien.