|NAHB President Bruce Smith
With the economy clearly on a downswing, the Bush Administration is proposing a comprehensive tax stimulus package to combat slowing economic growth and prevent a recession.
The proposed tax package includes a number of important measures that NAHB supports. These include the repeal of the estate tax, a decrease in the marginal tax rate (the rate often paid by entrepreneurs and small business owners) and the complete repeal of the Social Security Earnings Test, which discourages senior citizens from working.
The timing is perfect for working with Congress and the Administration to add additional housing stimulus measures to the proposed tax legislation to offset any further declines in the economy. To that end, NAHB is advocating a temporary change in the definition of a tax-deferred retirement account to allow investment in a first-time home by the purchaser or by his or her parent or grandparent.
The other measure that NAHB is urging Congress to enact is a temporary tax credit of up to $6500 for first-time buyers who purchase a new or existing home.
Fourteen percent of American families—13.7 million—spend more than half of their income on housing or live in seriously substandard conditions. Furthermore, the homeownership rate among young families has dropped in recent years, and homeownership rates for African-American and Hispanic households are 20 percent below the national average.
Enactment of these temporary tax measures would help hundreds of thousands of first-time buyers achieve homeownership while stimulating the nation’s economy. That’s a win-win scenario that we are very eager to see, and we will be working hard to achieve.