Members of the U.S. House of Representatives
Members of the U.S. Senate
Washington, DC
Dear Congress Member:
On behalf of the 350,000-member National Taxpayers Union I am writing to request your support of H.R. 3098 and S. 132, the ?Mortgage Insurance Fairness Act,? which would allow itemized tax deductions for premiums paid toward mortgage insurance. This legislation, introduced by Paul Ryan (R-WI), Eric Cantor (R-VA), and William Jefferson (D-LA) in the House, and Gordon Smith (R-OR) and Blanche Lincoln (D-AR) in the Senate, is receiving support from both sides of the aisle.
In recent years the federal government has supplemented the long-standing deductions for mortgage interest and property taxes with policies designed to preserve and promote homeownership opportunities. For example, the 1997 Taxpayer Relief Act substantially augmented the capital gains exemption for homesellers, while an earlier administrative action from the IRS allowed for deductibility of mortgage ?points.?
Yet, an additional financial consideration remains for millions of homeowners. Mortgage insurance is a critical factor in allowing many moderate-income families, first-time buyers, and veterans to obtain their piece of the American Dream, but the larger costs of using this option do not receive a similar level of tax treatment provided to those who can afford larger down payments. Equally important, mortgage insurance expenses occur during the early part of the loan, when many new homeowners hope to implement long-term plans to build financial assets.
For these two reasons alone, H.R. 3098 and S. 132 represent a logical step in helping to mitigate the federal tax consequences for the costs of buying and maintaining a residence. Granted, the legislation is not perfect, as it unnecessarily contains a ?phase-out? of the deduction based on arbitrary income levels. From the taxpayer?s perspective, however, the two bills represent a better approach to affordable homeownership than enactment of bureaucratic subsidies or expansion of the Government-Sponsored Enterprises currently involved in mortgage finance matters.
Ultimately, a simpler, fairer, and less burdensome tax system could prove to be the friendliest policy toward homeowners, by allowing them to keep more of their own hard-earned money. Until then, H.R. 3098 and S. 132 can give Americans some additional tax relief to help them reach the financial prosperity they deserve. Our members encourage you to join the growing list of current co-sponsors on the Mortgage Insurance Fairness Act who seek to reduce the costs and boost the opportunities for owning a new home.
Sincerely,
Pete Sepp
Vice President for Communications