NAR_grey_logo-01

Plan to Curb MID Remains in Play

By Robert Freedman, Senior Editor, REALTOR® Magazine
President Obama’s deficit reduction commission flamed out, right? It needed to get 14 of its 18 members on board for the commission’s final report to go to Congress for an automatic vote on its recommendations, which include curbing the mortgage interest deduction. But the commission only received 11 votes, so we’re back to square one, right?

Actually, we’re not back to square one. Although the report doesn’t automatically go to Congress for a vote, the individual recommendations in the report are alive and well and could yet be voted on by Congress. That’s because there’s nothing stopping President Obama from taking the pieces of the report that he likes and including them in the proposed budget he sends to Congress in January.

Will changes to MID be part of the mix? They could be. The President took a swing at MID last year, when he proposed some curbs for the wealthiest households. Those curbs failed, but the effort shows that the President isn’t hesitant about taking on MID.

So, the deficit commission report in its own way is alive and well. It’s just that the script Congress will follow for dealing with it isn’t known upfront but will be written as the budget debate unfolds next year.

To get  a sense of what that unfolding will look like, NAR Vice President Pamela Geurds Kabati sat down with NAR Tax Director Linda Goold and NAR Deputy Chief Lobbyist Jamie Gregory for an 8-minute video interview.  Their conclusion on how things will unfold: You can count on REALTORS® having to step in multiple times to help shape the debate on MID as well as capital gains and other tax issues before the process is over.

As it is, NAR has a Call for Action in place right now. If you haven’t contacted your member of Congress or senator about your concerns over changes to MID and the other federal programs that support home ownership, you can do so easily at the REALTOR® Action Center.

Robert Freedman

Robert Freedman is manager of multimedia communications for the NATIONAL ASSOCIATION OF REALTORS®. He can be reached at rfreedman@realtors.org.

More Posts

Comments
  1. Earick Ward

    The MID was tied to changes to the tax code. Allowing the MID to occur without the concurrent tax code changes will be very destructive to the housing market and the broader economy.

  2. The proposal to change MID in any way is definitely a snowball turning into an avalanche. In the current state of upside down mortgages, price changes and buyer
    market activity this change would definitely put a higher burden on the current home owner as well as future owner. The current owner would incur a tax liability and in many instances due to today’s economy (higher gas, food prices, savings used for living expenses etc) would not be able to handle this additional debt.

    Seeing what can be done to eliminate the “pork” and special interest projects that are passed would make more sense. The general public cannot lose one of the few “savings” portals available.

    Homeowners are not the only group that would be affected for added expense would be passed on to the tenant, decrease the probability of a comeback in the housing market (and its trickle effect of benefiting other industries-retail, trade, construction, banking, etc.) and more disruption in an area that is already fragile.

    It seems so easy to perceive that reducing or eliminating MID is the answer to all our deficit problems, however the wasteful spending and entitlements without being productive in some fashion in our country continues to drain our funds, motivation and
    pride in one self.

  3. Gary O'Neal

    No fear, the MID will not be touched during this economy. It will and should be when the market and the economy is improving. I’ve sent lettesr to my Senators and my Representative stating that I am a member of NAR who feels (unlike NAR) that MID needs to be curtailed for all SFR loan balances over $1 million with a COLA, but not until there is economic stability.

    NAR’s outrageous Lobby expenditures often make no economic sense which is why I have been opposed to donating to the PAC since my first license was issued in 1978. You NEVER ask your members what they feel about the issues before forking over huge sums of our money, what a travesty that you don’t seem to care.

  4. Lloyd Binen

    Which is worse for real estate: (1) losing the MID on vacation homes and the portion of interest paid on loans for primary residences greater than $500,000 (but getting a reduced tax rates and a tax credit); or (2) National bankruptcy? Hands down…National bankruptcy will absolutely devastate the real estate market. We’ll pine for the good ole days of 2009 and 2010. And many smart economists believe we’re on a path to bankruptcy unless we get the debt under control. I believe them.

    When every special interest pushes to protect its own turf, nothing gets accomplished. Let’s at least be open-minded. And, if we Realtors and homeowners suck it up, insist that all special interest groups sacrifice equally in order to prevent insolvency.

  5. Charlie Elwis

    Distortions caused by a tax code which gives preferential treatment to residential real estate have contributed to our desperately weak economy. For too long, the tax code has rewarded taxpayers with deductions for expenses which do not increase the productive capacity of the United States. The time has come to wean Americans from the fruits of debt for non-productive assets. The MID has contributed to the artificially inflated cost of real estate and diverted assets from investment in our future as a nation.

    Time is running out for the U.S. Either we turn in the direction of providing the highest quality products and services to our trading parties at the most competitive prices or we realize that we are a declining country that is at the mercy f the whims of greater powers.

    The world is dangerous. Since our military power derives ultimately from our economic power, the continuance of the mortgage interest deduction is tantamount to committing a slow and painful national suicide.

    I refuse to contribute one dime to an unpatriotic NAR. Although I have been a Realtor in good standing for thirty-one years, I realize that my narrow short-term financial interests are insignificant compared with my duty to my country..

ADD YOUR COMMENT