
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SUNDAY, July 9, 1995                   TAG: 9507100020
SECTION: CURRENT                    PAGE: NRV3   EDITION: NEW RIVER VALLEY 
SOURCE: 
DATELINE:                                 LENGTH: Medium

DEDUCATION LIMIT WOULD HURT MIDDLE CLASS

This letter is in response to a recent letter to the editor on mortgage interest deduction. The proposal to limit the deductibility of mortgage interest is a direct attack on the more than 24 million Americans who claim the deduction each year.

This is a middle-class issue: 76 percent of these families have household incomes of less than $75,000. More than 45 percent have incomes below $50,000. According to the Joint Tax Committee of the U.S. Congress, eliminating the deduction will mean raising taxes over the next five years by more than $313 billion.

First-time homebuyers will be hit more severely than owners of expensive homes. Eliminating the mortgage interest deduction will raise the cost of owning a home by as much as 33 percent. The budgets of many middle-class families will not be able to handle such a dramatic rise in their single largest monthly expense.

Eliminating the home mortgage interest deduction will have a devastating effect on the value of American homes. Industry analysts predict it could reduce home values by as much as 20 percent.

Nationwide, property taxes generate 75 percent of all revenues for local governments. Reduced home values and home ownership will force local governments either to raise property taxes or cut essential services.

Owning a home is more than a financial decision - it is a quality of life issue. Communities with high ownership rates have higher levels of social and political participation. Home equity, built by home owners over many years, is the largest savings vehicle for most American families.

Proposals to eliminate the deduction would shatter the contract that commits Congress to helping all Americans achieve the dream of owning their own home.

Jean Simmons

president, New River Valley Association of Realtors

by CNB