By Mark Dale
As an awakened Congress begins to tackle this country's financial issues, there will likely be an attempt to herd all the sacred cows to the slaughterhouse in the name of compromise.
Mark Dale, legislative
chairman for the Oklahoma
State Home Builders Association
Certain programs and industries, however, deserve closer scrutiny as to their real cost and their future impact on a steady economy. One of those needing careful study is housing.
The home mortgage interest deduction is currently under the microscope, as it should be. "Housing" was given a bad rap with the 2008 financial meltdown, but we must remember that the trigger to the collapse was the over-hype and failure of housing financial instruments abused on Wall Street, not housing per se. Homeowners sought the American dream of homeownership, and builders and developers only provided it because the purchase money seemed to be available.
Homeownership continues to remain at the top of the wish list for nine out of 10 Americans. A home continues to represent a desire for comfort, stability and the establishment of wealth. A recent bipartisan national poll showed that more people own homes than own stock or have structured retirement plans. The ability to deduct their home mortgage interest as their annual income tax returns is a large incentive, both to first-time and move-up buyers.
Herein lies the distinction between the mortgage interest deduction and most of the other federal government programs being slated for trips to the surgeon. This isn't about wasteful spending. It is not about tax money already collected and siphoned through the hammy paws of government bureaucrats as it tries to find its way back to the taxpayers as benefits. Rather, this is money earned by hardworking Americans that they wisely chose to invest back into the economic system.
Builders and developers are only a small fraction of the beneficiaries of a healthy housing market. Tradesmen, material suppliers, fixture vendors, lenders, title companies, common laborers and those who work to maintain homes all enjoy gainful employment in the private sector. The tax deduction only comes into play when the system is working, due to supply and demand. The economic stimulation is a natural occurrence, created by the forbearance of tax, not as a handout that has endured the bureaucratic filtration process of collected income taxes.
These distinctions merit careful consideration by our congressional representatives in Washington. The cost and benefit of every program deserves their study as they make difficult but necessary decisions to put our country back on track. Housing, and particularly the mortgage interest deduction, is an issue with financial ramifications that extend past rudimentary, blind cuts of government spending. A sound, demand-driven housing program can provide its own economic stimulus plan for Americans.
Mark Dale is legislative chairman for the Oklahoma State Home Builders Association and a director of the National Association of Home Builders.