Widely dismissed as DOA when it was introduced, a massive overhaul of the tax code including perks for homeowners proposed by House Ways and Means Committee Chairman Dave Camp contains a seductive formula that will be at the core of a major tax reform push next year:
• Give corporations the rock-bottom low tax rates they’ve been seeking from Republicans for years.
• Expand the standard deduction significantly enough to pull in the vast majority of the tax-paying public. When the standard deduction exceeds what most people are getting by itemizing, they’ll happily switch to the easier check-the-box approach.
Though the plan has no chance of passage this election year, top Capitol Hill tax policy specialists tell me that real estate professionals who brush off Camp’s plan do so at their own peril.
It’s not just Camp — a Michigan Republican who is the House’s most influential tax policy leader — who supports this combination as the key to simplifying the tax system. So does the Senate’s most important tax legislator, Sen. Ron Wyden, D-Ore., who chairs the Senate Finance Committee.
Wyden, who has promised to soon begin preparations for a joint House-Senate tax system overhaul effort, authored a reform package three years ago based on these two concepts — lower brackets plus a sharply expanded standard deduction. Wyden was not in a position of power then, but he is now.
Camp’s bill promises corporations and individuals maximum marginal income tax brackets of 25 percent, and pushes the standard deduction for joint filers to $22,000 ($11,000 single filers).
But here’s the Trojan horse for housing that has drawn almost no attention: Camp’s bill would essentially eliminate itemization for the overwhelming majority of homeowners, even while leaving the mortgage interest deduction in the tax code at a reduced level.
Senior Director, Coldwell Banker New Homes Division
With over 200 condominium, townhome and loft projects successfully marketed
“Fewer properties for sale with such remarkably low interest rates make it a great time to sell but a more difficult time to buy”