“We want more people owning their own home. It is in our national interest that more people own their own home.” — President George W. Bush, December 16, 2003
Under the last Republican president, encouraging people to buy a home was an explicit government priority, a cornerstone of the Bush administration’s “ownership society.” Bush proposed new tax credits to incentivize home buying, pushed for loan guarantees and easier lending standards, and signed legislation providing federal assistance for down-payments and closing costs for tens of thousands of Americans.
Nearly a decade-and-a-half later, that GOP mantra is no more. The sweeping tax overhaul House Republicans introduced on Thursday would eliminate or scale back some of the biggest incentives for home buying in federal law. It would lower by half, to $500,000, the cut-off for taking the popular mortgage-interest deduction, cap the property-tax deduction at $10,000, repeal the deduction for moving expenses, and force more people to pay taxes on the profits they earn from selling a home.
To a significant extent, the changes are designed to raise revenue to offset the steep cost of reducing overall tax rates for businesses and individuals. Republican authors of the plan say many of the families who might lose these benefits will see an overall tax cut—more than $1,000 in some cases—and that those whose taxes could go up are wealthier to begin with. But conservative policy analysts say the proposals also reflect lessons learned from the government’s role in the housing crash at the end of Bush’s presidency and mark a broader shift away from using the tax code to encourage specific economic decisions.