ASHI LEGISLATIVE ALERT
IMMEDIATE ACTION REQUESTED
Action Item: Please contact your U.S. Senators to support retention of the Home Mortgage Interest Deduction (HMID)
This is an update - and a further call for grassroots action by ASHI members -- of a May 6 Legislative Alert to support full retention of the Home Mortgage Interest Deduction (HMID).
HMID is a key element in federal policy that triggers home inspection revenue opportunities for ASHI members. ASHI vigorously supports retention of this valuable federal policy.
The recent event: Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) have sent a "Dear Colleague" letter to their fellow Senators to formally elicit their suggestions and priorities for comprehensive tax reform.
The Baucus-Hatch Dear Colleague contains this transparent suggestion: "...we believe it is important to start with a "blank slate"-that is, a tax code without all of the special provisions in the form of exclusions, deductions and credits and other preferences..."
Clearly, this phrase is an invitation to overlook the precedent and value of HMID -- or support gutting it by moving it down the priority list by merely omitting it as a priority in the record.
ASHI's view is that such an outcome would have serious negative business impacts for ASHI members. ASHI is fighting such a negative result accordingly.
We urge you to contact your U.S. Senators by telephone or letter to state your views regarding HMID. Please state your own views -- but see the text of the ASHI policy statement at the end of this Alert, which may assist you in making your contacts.
How to find contact information for your U.S. Senators: Go to http://www.contactingthecongress.org/. Type your address where prompted and click "Submit it". You will see a display of your officials, including Senators. To call your Senators, dial the Senate switchboard at (202) 224-3121. Ask to be connected to the Senator you would like to reach. Once connected to the office in question, tell the receptionist that you are a constituent, and you would ask the Senator to tell Senators Baucus and Hatch your opinion on retaining the Home Mortgage Interest Deduction.
Thank you for your grassroots help in protecting the Home Mortgage Interest Deduction.
Statement of The American Society of Home Inspectors Regarding The Home Mortgage Interest Deduction
I am writing on behalf of the American Society of Home Inspectors (ASHI), representing nearly 6,000 home inspection professionals across the United States and North America.
ASHI strongly supports the retention of the home mortgage interest rate deduction (HMID) currently allowed under the U.S. tax code.
Further, ASHI opposes strategies that would diminish the value of the homeownership incentives offered by the HMID, particularly strategies that would limit total itemized deductions for mortgage interest on first and second homes, currently allowed under the U.S. tax code.
ASHI's views are predicated on 1) the impact, relevance and utility of the HMID in incentivizing home ownership in the United States, and 2) the economic/jobs impact on the professions and industries that are supported by the homes sales economy.
The number of U.S. taxpayers whose abilities to establish and maintain home ownership in part due to the HMID is staggering.
A recent evaluation prepared by the congressional Joint Committee on Taxation for consideration by the U.S. Senate Committee on Finance determined that, based on 2009 tax returns actually filed by U.S. taxpayers, approximately 36.5 million tax returns took advantage of the itemized deduction for home mortgage interest, claiming deductions for $420.8 billion of home mortgage interest.
In fact, JCT found that total claims were even higher when considering related deductions such as for deductible mortgage points and qualified mortgage premiums.
Clearly, the homebuying public constituency making use of the HMID represents a huge portion of the total consumer marketplace in America. The HMID has become an institutionalized factor in the home realty sales market whose disappearance or diminishment would have widespread negative economic impacts.
The United States is hardly alone in recognizing the broad economic benefits of home ownership and stimulating home ownership via tax incentives. Among the 33 countries that are members of the Organization for Economic Cooperation and Development, 18 provide a deduction for mortgage interest.
Further, the U.S. is not extreme in its tax policy supporting home ownership, ranking roughly in the middle of OECD countries.
The HMID deduction may lower the cost of capital required to purchase a home and service the debt by as much as seven percent by one estimate, allowing U.S. homebuyers to buy somewhat larger homes for their family enjoyment, or to use the savings for other purposes that benefit their interests or grow the economy.
Of course, a large portion of the realty-related economy depends on the stimulating effects of the HMID, including realtors, mortgage lenders, construction, renovation and repair contractors, appraisers, and of course home inspectors.
The United States continues to suffer a persistent slump in home sales and home ownership that exerts a depressive effect on the overall realty-related economy. A diminishment of the HMID would only serve to continue, and perhaps exacerbate this pervasive problem, with the appurtenant negative impacts on the professions such as home inspection.
In sum, ASHI suggests any reduction in the effective value of the HMID to U.S. taxpayers would be the wrong move at the wrong time, with multiple negative impacts across the American economy.
We urge the U.S. House, Senate and the Obama Administration to fully support the current tax treatment of the HMID, and to table any suggestions to the contrary.