WASHINGTON, D.C.- The tax reform plan proposed by Republican leaders in Congress and the White House overlooks one of the best and most immediate ways to spur economic growth and help everyday Americans who have been left behind: reprioritizing and rebalancing federal housing policy. The Republican tax plan calls for raising the standard tax deduction, which would lead to fewer households claiming the mortgage interest deduction (MID). The MID is a $70 billion annual tax expenditure that primarily benefits higher income households – a significant amount of the benefit of the MID goes to the top 1% of earners in the country. Doubling the standard deduction with no further changes to the MID makes the MID even more regressive than it is today – only some of the highest income Americans with the biggest mortgages would benefit.
The National Low Income Housing Coalition-led United for Homes campaign calls on the president and Congress to embrace smart reforms to the MID. This includes reducing the amount of a mortgage eligible for a tax break from $1 million to $500,000 – impacting fewer than 6% of mortgages nationally – and converting the deduction into a credit, providing a greater tax break to 25 million low and moderate income homeowners, including 15 million mortgage holders who currently do not benefit from the MID. These reforms would generate $241 billion in savings over 10 years that should be reinvested into critical rental housing solutions, like the national Housing Trust Fund and rental assistance, for families with the greatest needs – not used to pay for lowered tax rates for billionaires and corporations.
Having a decent, affordable and accessible place to call home transforms lives – giving people the stability they need to climb the economic ladder, improve their health, and allow children do better in school—and an investment in affordable homes creates jobs and strengthens communities.
It is now up to Congress to turn this tax reform proposal – which opens the door to direct changes to the MID - into legislation. We call on leaders in the House and Senate to seize this once-in-a-generation opportunity to address one of the biggest barriers to economic success for families struggling to get by: the lack of decent, accessible and affordable homes for the lowest income people.