first_imgA new proposal by President George W. Bush’s tax-reform panel would put the dream of homeownership out of reach for many Californians. For many others, it would mean $5,000 or more in income taxes every year. This proposal is wrongheaded and should be steadfastly opposed. Here’s what the Bush panel’s proposal would do: Change the home-mortgage deduction to a credit on interest paid on up to the first $412,000 of a mortgage. For interest paid beyond that, nothing would be credited. Eliminate the deduction for state and local taxes – this includes state and local income and property taxes. AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREWalnut’s Malik Khouzam voted Southern California Boys Athlete of the Week This proposal would have little effect on homeowners in some states, where the cost of living is low and the average home goes for a mere $147,000. But for a high-cost state like California, where the average home now costs $569,000, and more than half of all new mortgages are more than $350,000, the impact of this proposal would be huge. In Los Angeles County, for instance, the average new homebuyer would pay more than $5,500 in taxes every year. And those with larger mortgages would pay even more. In San Francisco and Orange County, the average new homebuyer would pay more than $9,500 in taxes. In total, the proposals would force Californians to pay $34.1 billion more in taxes every year. This proposal is aimed directly at the heart of middle-class Americans, who are struggling to get by every month. One in every four Californians takes a deduction for state and local taxes. One in three takes a deduction in mortgage interest. And, nearly half of the 8 million middle-income taxpayers take state and local tax deductions or mortgage interest deductions. For some of these middle-class American families, the proposals would mean they can no longer afford to purchase their first home. For others, it would lead to default, bankruptcy and forfeiture. The federal government should be in the business of making homeownership more affordable, not less. This holds true for all Americans, but especially those in high-cost, high-tax states like California, which has one of the lowest homeownership rates in the country. This is just one more example of the backward priorities of the Bush administration, which is continuing to push policies that benefit the wealthy at the expense of the middle class. The administration is also seeking to make permanent ill-advised tax cuts at a cost of $11 trillion over 75 years – even when it means that there is less money available for other priorities like cops on the street, better schools, and cleaning up the environment. It wants to give millionaires an average tax break of $100,000 while middle-income families have received a mere $742. So in my view, the Bush administration is going down the wrong road. This nation could see $20 billion in savings just this year by rolling back the tax cuts for millionaires. And over five years, this would save $96 billion. We should not try to find tax savings on the backs of middle-class homeowners. Millions of Californians are living on the edge today. Some use half their monthly income to pay their mortgage. Others have interest-only loans. Interest rates are on the rise. So any additional costs may push Californians over the edge. Californians simply cannot afford it. The dream of homeownership is a vital part of what it means to be American. It is about seeking a brighter future for yourself, your family and your children. But this proposal runs counter to this idea. It makes homeownership less affordable, not more. And it puts the burden on those who can least afford it. It should be strongly opposed. Dianne Feinstein, a Democrat, is California’s senior senator in the U.S. Senate.160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!last_img

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