In late April, President Donald Trump released a one-page tax reform proposal. The laudable goals of this proposal are (1) to grow the economy and create jobs, (2) to simplify the tax code, (3) to provide tax relief to American families—especially middle-income families—and (4) to lower the business tax rate from one of the highest in the world to one of the lowest.
Not specified in this relatively brief document was what might happen to the mortgage interest deduction and other home ownership incentives. In fact, the only mention of them was a statement that read, “Protect the home ownership and charitable gift tax deductions.”
During budget talks, elected representatives in Congress can always think of myriad ways they would spend your tax dollars if they had them. And there are enough theories about tax reform to keep Congress busy from now on.
But more important than these theories are the ways in which tax incentives have worked in the real world to encourage home ownership and, thereby, to create and preserve the American Dream, and the ways in which home ownership benefits all of us—those who own homes and those who dream of doing so one day.
The United States was once a renter society, ruled by aristocratic landowners. Fortunately, unlike any other period in history or any other place on earth, those landowners unselfishly built the lasting mechanisms of liberty and willingly spread the wealth of landowning.
During the past century, home ownership was responsible for the largest redistribution of wealth in American history. It is the easiest way to move up the economic ladder, and it is the best way for those who have not inherited wealth to build it.
Research has shown that home ownership not only benefits individuals by helping them build wealth but also strengthens families and results in greater educational attainment.
And home ownership benefits communities. Home owners put down roots. They volunteer in the schools. They become invested in the neighborhood. They join civic associations. And they vote in local, state, and national elections.
If you own a home now, if you dream of owning a home someday, or if you are the parent of someone who dreams of becoming a home owner, then any discussion about tax reform should be about retaining the incentives that encourage home ownership.
It’s not theoretical. It’s proven, and it’s personal!
Don’t just tell lawmakers what you want them to do; tell them why it matters. Don’t let them forget that you are fighting to hold onto your own piece of the American Dream and to preserve that Dream for future generations.
That message will stick with them long after all the theoretical numbers have changed and the reasons for those numbers have been forgotten.