11-05-2005, 09:53 AM
| | Bush's Tax Plan Could hurt millions of home buyers
WASHINGTON (AP) -- That most sacred of tax breaks, the mortgage interest deduction that has helped millions buy homes, could vanish if President Bush and Congress follow the recommendations of his tax advisory board.
Nine tax experts, tasked with developing simpler and fairer tax laws, concluded that the deduction does more for wealthier taxpayers than for people struggling to buy a home. But mortgage bankers and real estate agents see irreparable harm if the tax break disappears.
The National Association of Realtors estimated that housing prices could decline 15 percent, bad news for owners who have seen the value of their homes increase.
"You're going to be taking away from Middle America," said David Lereah, the association's chief economist. "Everyone, whether you use the mortgage interest deduction or not, the value goes down. You've just reduced the retirement nest egg for everyone."
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