Bush tax reform plan in jeopardy
By Mary Dalrymple
Associated Press
WASHINGTON — A Republican lawmaker said yesterday he has assembled enough support to kill an idea advanced by President Bush's tax advisory board to replace the mortgage interest deduction.
Rep. Jerry Weller of Illinois said he and six other Republicans on the House Ways and Means Committee, which oversees tax laws, oppose the proposal to convert the popular deduction to a credit and limit the size of mortgages eligible for a tax break.
Their seven votes against it would kill the proposal if it ever comes before the committee, Weller said.
"The home mortgage interest deduction, the state and local tax deduction, are the most important middle class tax breaks in the tax code today," Weller said. "Any of these types of proposals are dead on arrival in Congress."
Weller and Rep. Mark Foley, R-Fla., are collecting signatures on a letter telling the White House they are concerned about the effect the change could have on homeowners and the real estate market.
"To jeopardize these deductions would be to place these benefits at risk and potentially reverse the progress our nation has made toward allowing every citizen to participate in the American Dream," according to a draft of the letter.
The President's Advisory Panel on Federal Tax Reform issued its recommendations last week. They will be reviewed by the Treasury Department before going to Congress.
"The president has charged us with presenting tax reform recommendations that respect the importance of homeownership in this country," said Treasury spokesman Taylor Griffin.
The panel recommended redirecting tax breaks for homeownership toward middle-income taxpayers by replacing the mortgage interest deduction with a 15 percent tax credit.
It also urged the president to limit the size of mortgages eligible for the tax break to a size closer to regional housing prices, an idea meant to curb the overconsumption of housing.
The plan has met stiff resistance from the housing industry.
Other Ways and Means Republicans against the idea are Nancy Johnson of Connecticut, Eric Cantor of Virginia, Ron Lewis of Kentucky, Clay Shaw of Florida and Jim Ramstad of Minnesota.
