Kudos to the Journal’s editorial board for highlighting the importance of staving off the elimination of state and local tax deductions in the pending tax-reform debate. As the Nov. 2 editorial (“State and local deductions at risk”) pointed out, many residents in high-tax states like Rhode Island would likely see an increase in taxes, not savings. Beyond that, however, there are other compelling reasons to maintain these deductions for citizens in all states, particularly those deductions that relate to real estate.
Sustainable home ownership is and always has been a way to achieve the American dream. According to a Federal Reserve survey of consumer finances, a typical homeowner’s net worth in 2013 was $195,400 while a renter’s was $5,400. Furthermore, with every home sale, money flows back into the local economy with the purchase of home-related goods and services, creating and sustaining jobs in the process. Make no mistake, housing is a huge economic driver.
With homeownership at an all-time low, not due to choice but due to barriers to entry, is it wise to take away incentives to home ownership? Not in the least.
The latest reports on tax reform indicate that the deductions for mortgage interest and real estate taxes, which were headed for the chopping block, could be saved after all. We should all ensure that outcome by doing our part in making sure our congressional delegation understands that a blow to homeownership is a blow to our residents and our economy.
The writer is president of the Rhode Island Association of Realtors.