Tax Reform Could Deliver a Tax Hike for Homeowners
While Cannon County school children singiing the National Anthem become innocent objects in the local GOP self image of greatness, the truth about the tax reform proposals swirling around Washington, D.C., Which promise lower tax bills for American families begin to surface.
New estimates indicate that many middle-
The study, “Impact of Tax Reform Options on Owner-
While most individuals would see a tax decrease under such a proposal, the study estimates that many middle-
“Tax reform and lower rates are worthy goals, but only if we can achieve them in a fiscally responsible way,” said NAR president William E. Brown, a second-
The study, which was commissioned by NAR and prepared by PwC (PricewaterhouseCoopers), estimates that this tax increase would result from the interaction of several provisions in the reforms under consideration. For many homeowners that currently benefit from the mortgage interest deduction, the elimination of other itemized deductions and personal exemptions would cause their taxes to rise, even if they elected to take the increased standard deduction. For others, the elimination of the state and local tax deduction alone would result in higher federal income taxes.
In addition to increasing taxes on many middle-
Those elements include lowering and consolidating marginal tax rates to only three rates, setting a top income tax rate of 33 percent, doubling the standard deduction, eliminating all itemized deductions (other than charitable contributions and mortgage interest) and personal exemptions, eliminating the alternative minimum tax, and capping the tax rate on pass-
PwC estimated that roughly 35 million households will claim the mortgage interest deduction in 2018, three quarters of which have incomes between $50,000 and $200,000. According to NAR, roughly 70 percent of those eligible for the MID claim it in a given tax year.
“A tax reform proposal that hikes taxes for homeowners is a raw deal, and consumers know it,” said Brown. “Leaders in Washington who are driving tax reform have shown every indication that they have the best of intentions, and we’re hopeful they’ll consider our study as this process plays out in the months ahead.”