The Oregon Democrat said such items would “provide certainty to the economy, protect jobs and maintain important priorities for working families.”
But Are They a Good Idea?
Critics such as Dennis J. Ventry Jr., a tax law expert at the University of California Davis, say some housing incentives such as the mortgage interest tax break have reshaped investor choices and delivered out-sized benefits to the wealthy.
Camp has argued that some tax breaks must be reduced in order to lower rates and boost the economy. The mortgage interest deduction remains an inviting target, with a projected cost of $456 billion over five years.
According to the Office of Management and Budget, it ranks second among 159 tax expenditures, exceeded only by the exclusion for employer health care insurance contributions.
“There are trade-offs to lower rates, and to get the kind of economic growth that the country needs,” Camp said. He said his rate-lowering blueprint would “reduce rates, grow the economy and increase housing prices.”
But in a tough election year, GOP leaders moved away from Camp’s proposal and the notion of curbing popular tax breaks.
Critics such as Reps. Sander M. Levin of Michigan, the ranking Democrat on Ways and Means; and Linda T. Sánchez, D-Calif., believe there will be intense opposition to cuts in incentives like the mortgage interest deduction, especially from lawmakers from areas with high median home values.
“I think they would be a very hard sell,” Sánchez said.
Levin said there was a backlash among constituent groups to Camp’s efforts to scale back tax breaks. “There was real concern about where he was going with the mortgage interest deduction,” Levin said.
With no floor action expected on an overhaul, both Camp and his allies now are making clear that contentious tax trade-offs are on hold.
“I don’t think Camp would propose that, outside of the context of comprehensive tax reform,” said Pat Tiberi of Ohio, a senior Republican tax writer.
Camp said he would emphasize permanent extensions of tax breaks that fit his vision for a tax overhaul, while leaving aside a number of policy disputes.
Nunes said his proposal would show support for a key part of the housing industry, without closing the door on broader changes to the tax code. “It’s all about home ownership,” he said. “It’s no different than the interest deduction.”
Ventry predicted the private mortgage insurance bill would likely to draw broad support because it targets “a different demographic — lower- and middle-income and younger home buyers.” A consumer normally must buy mortgage insurance when he provides a down payment that is less than 20 percent of the purchase price.
Supporters say big bipartisan votes in favor of Nunes’ bill and other proposals could serve as guideposts for a post-election tax break extension package and for a 2015 tax overhaul. Votes on any tweaks to the mortgage interest deduction itself — which became a permanent part of the tax code in 1986 (PL 99-514) — likely would be put off until the 114th Congress.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.