A Message from President Mike Theo: The Good Fight

 June 08, 2017

When the cause is right and your commitment is strong, sometimes it’s good to fight for what you believe regardless of your chances of success. Such is the case with our efforts to protect the pro-housing provisions of the current tax code amidst the impending battle over tax reform. It will be a tough fight indeed.'

We have long espoused that our advocacy efforts, at all levels of government and in the courts, give voice to not only REALTORS® and other real estate professionals, but also to those who own a home or other real property. Unlike informational Internet portals or others operating in the real estate space, we fight for property owners after the transaction — beyond the buying and/or selling of property and during the owning of property. This tax fight presents an opportunity for us to communicate this fact to our buyers, sellers and existing homeowners.

As we embark on our advocacy efforts to help Congress pass meaningful tax reform that does not harm homeownership, there are many in Congress, in the Trump administration, on Wall Street, in the media and in academia, who are arguing against maintaining the mortgage interest deduction (MID) and the deductibility of state and local taxes. And while some proposals — most notably from the Trump administration and the House Republican leaders — retain the MID, they also significantly raise the standard deduction such that many tax filers who currently itemize — which is about 30 percent of all filers — will stop, dropping to just 5 percent by some estimates. There are also credible estimates that home values, at most if not all price points, will also take a hit as a result. If this all comes to pass, there will be little tax distinction between owning and renting a home.

But what does the average citizen think of all this? We thought that was a good question too, so we asked them. In a recent survey of voters in Wisconsin, we asked questions about current tax laws that support and promote homeownership and about various tax reform ideas being floated. Here’s what we found:

  • Voters strongly support the MID: Eighty-three percent of voters said the MID is a good idea, and 47 percent said it’s a “very good” idea.
  • The MID is a factor in making the decision to buy a home: Eighty-four percent said the MID is a factor in deciding whether to buy a home — 63 percent said it’s a big factor or somewhat of a factor, while 33 percent said it was a small factor or no factor. 
  • The property tax deduction helps people: Over half of voters, or 59 percent, say the property tax deduction helps them. Thirty-six percent say it has no effect.
  • The property tax deduction helps make housing more affordable: An overwhelming 77 percent of voters agree that the deductibility of local taxes lowers the tax load for working middle-class families, and 77 percent believe that makes homeownership more affordable. 

But we didn’t stop there. We went on to probe Wisconsin voters’ feelings on some of the pending tax plans being discussed in Washington, D.C. Here’s what they said:

  • Voters strongly oppose eliminating real estate tax deductions for taxes even in exchange for lower tax rates: Seventy-six percent of voters oppose eliminating the MID, and 49 percent strongly oppose; while 72 percent oppose eliminating the property tax deduction, and 46 percent strongly oppose, even if they’re receiving an overall tax cut and the tax system is simplified. 
  • Simply put, voters want housing affordability over lower rates: When asked which comes closest to their views, voters chose protecting real estate tax deductions that make housing more affordable over lowering and simplifying tax rates, 58 to 33 percent.

It’s important to note, however, that while voters strongly support protecting tax incentives for a primary residence, they do not support these deductions for second homes. Sixty-two percent would support eliminating the MID for second homes while 35 percent supported maintaining the deduction. Creating a less favorable tax code for second versus primary homes is a big problem for a housing market like Wisconsin’s. We have our work cut out for ourselves on this one.

The bottom line is voters tend to agree more with us than those proposing changes to the current tax code on these homeownership provisions. But here’s one important note about our survey that we should remember, and so should our friends in elected office: The sample for this survey was Wisconsin voters who voted in 2016, and it turns out 83 percent of them were homeowners. The correlation between homeownership and voting is very, very strong. 

I’ve written a lot lately about this epic tax reform battle we’re now entering because it’s important and it’s inimitable. But if the cause is right and your commitment is strong, you have to fight the good fight. This is the good fight — for us and for the homeowners we seek to protect.

This telephone survey was conducted for the WRA by American Strategies of Washington, D.C., between April 17-20, 2017. The sample size of 600 respondents — about half landlines and half wireless — provides a margin of error of +/- 4%. Summary points provided by American Strategies President Joe Goode.

Copyright 1998 - 2024 Wisconsin REALTORS® Association. All rights reserved.

Privacy Policy   |   Terms of Use   |   Accessibility   |   Real Estate Continuing Education