The Mortgage Bankers Association have given a thumbs-up to the Republican tax reform framework, another indication that the GOP tax push so far is avoiding outright opposition from the important housing sector.
David Stevens, the group’s CEO, wrote Republican leaders to say that the Mortgage Bankers Association looks forward to supporting the tax effort, and that “potential changes should be viewed holistically” — meaning that the package as a whole is worthwhile even though it would crimp some housing tax breaks.
“I wish to express our support for the efforts you are leading to enact comprehensive tax reform,” he wrote.
So far, the housing industry has split somewhat on the tax plan. The National Association of Homebuilders expressed support for the plan, and its members even voted to contemplate changes to the mortgage interest deduction to continue working with Republicans.
The National Association of Realtors, however, have criticized the framework on the grounds that it would double the standard deduction. That provision would be a “backdoor elimination of the mortgage interest deduction,” the group said, because it would lead more people to take the standard deduction rather than itemizing mortgage interest costs.
Having unveiled their tax plan, the Trump administration and GOP leadership now face the test of whether their members will be able to withstand lobbyists’ efforts to protect existing tax breaks that benefit their industries. The more breaks are kept, the harder it will be to achieve the goal of lowering tax rates.
This week, House Republicans debated whether to follow through on one of the major breaks, namely the deduction for state and local taxes paid. That deduction is also important to the housing industry, as it lowers the cost of property taxes.
In his letter, Stevens noted that the group strongly advocates removing one part of the Republican framework: The proposal to end the ability of some businesses to deduct interest costs from their taxable income.
The GOP framework includes several planks that help ensure housing sector support, including the preservation of low-income housing tax credits.
