President Bush, during his State of the Union Address on
Wednesday, noted that home ownership levels have been elevated "to the
highest level in history," and said that his plan for federal tax reform
will be simple, fair and "pro-growth."
His speech was welcomed by the home-building industry. The National Association of Home Builders issued a
statement today expressing support for several housing-related issues that Bush
highlighted in the annual address.
David Wilson, president for the association, said the
association supports Bush administration plans to "eliminate unnecessary
regulatory barriers that impede economic and job growth; to pass class action
tort reform to curb the number of frivolous lawsuits that unnecessarily drive
up the cost of housing; to enact association health plan legislation so that
small businesses are able to provide quality, cost-effective healthcare to
their employees; and to make tax relief permanent."
While the president cited a record-high home ownership rate,
the association "is urging the administration to renew its support for
home ownership tax credit legislation that would increase the supply of
affordable homes."
The administration has earlier expressed support for a tax
credit that is designed to increase the supply of affordable homes built in
low-income communities, and dozens of housing and community development groups
rallied around the plan to implement this credit.
"The tax credit received majority support in each
chamber of Congress last year, and (the association) will work with lawmakers
to move this proposal forward in the year ahead," the association
announced today. NAHB has about 220,000 members, and its members are expected
to construct about 80 percent of the 1.84 million new housing units that are
projected this year.
Wilson said the proposed initiative could spur the
production of 50,000 new or rehabilitated homes each year.
During his speech, Bush said, "we must free small
business from needless regulation" and rid the legal system of
"irresponsible class actions and frivolous asbestos claims."
The association agreed with this directive and also with
Bush's plans to create "associate health plans for small businesses and
their employees."
President George W.
Bush |
Bush said that the federal tax code is "archaic,"
"incoherent," and a burden, and he has appointed a bipartisan panel
to examine the code "from top to bottom," while ensuring that it is
"pro-growth, easy to understand, and fair to all."
When Bush established
the advisory panel on tax reform earlier this month, the executive order states
that the commission shall recognize
"the importance of home ownership."
The National Association of Realtors welcomed Bush's
declared support of association health plans in his address – such plans have
been promoted as a major priority for association members. The Realtor
association has more than 1 million members.
While there were some pre-election jitters in the housing
industry about possible plans to reduce or eliminate a mortgage interest tax
deduction, a tax benefit for home buyers, Bush made no reference to this tax
benefit in his address.
And he affirmed support for this deduction during an October
campaign stop in Ohio. At that time, during a meeting with the National
Association of Home Builders' board of directors, Bush said, "I believe
that the mortgage interest deduction enables more Americans to achieve the goal
of home ownership. It is an important part of our tax code."
The National Association
of Realtors also supports this tax incentive. "Deductions for mortgage
interest and property tax expenses encourage home ownership and stimulate home-building,
which creates jobs both directly and indirectly, fuels our economy and benefits
growth at all government levels with increased taxes and revenues,"
according to an association position statement.
Also according to this statement, "Further restriction
would decrease home ownership, depress housing values and reduce home construction."
Linda Goold, tax counsel for the Realtors association, said
there doesn't appear to be any imminent threat to real estate tax law that
would negatively affect the housing market.
But, she said, "You can never stop being
vigilant." She said that if there were to be changes to the mortgage
interest tax deduction, "that would be the primary issue of the
association – period. I cannot imagine an issue that would even trump
that."
Many Americans are familiar with the basic premise of the
mortgage interest tax deduction, and it would likely incite a negative response
if legislators messed with this deduction, she added.
The Mortgage Bankers Association, which represents an
industry with about 400,000 professionals, is also a firm supporter of
preserving the mortgage interest tax deduction. The association, in its legislative
agenda for 2005, announced that it will "advocate for tax reforms that
will preserve the mortgage interest tax deduction to promote the continued
expansion of home ownership opportunities for more Americans."
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