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Published : February 07, 2012 |
Author : kchbaseo
Category : Business | Total Views
: 48 | Unrated
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A national discussion about the mortgage interest deduction has found its way to Kansas. While lawmakers will consider many issues this session – school finance reform, redistricting, the state employee retirement system – none have garnered as much attention as tax reform.
Kansas Governor Sam Brownback proposed a change in state tax policy during his State of the State last week that lowers income tax rates. To do so includes eliminating most credits and deductions, including the mortgage interest deduction.
Republican leaders in the Kansas House of Representatives have unveiled their own plan to lower income tax rates while preserving the mortgage interest deduction.
“The HBA is committed to ensuring the final product is in the best interests of Kansas homeowners and homebuyers,” said HBA Executive Vice President Sara Corless. “We applaud the Governor and House leaders for working to strengthen the state’s economy and to create jobs. Homeownership must be a vital component of that plan and the discussion.”
The Governor’s proposed plan which he describes as fairer, flatter, and simpler consolidates income tax rates from three brackets to two and lowers the rates. Those making under $15,000 ($30,000 married filing jointly) would pay a 3 percent rate while those making more would pay 4.9 percent. Currently tax rates are 3.5 percent, 6.25 percent and 6.45 percent.
The plan would also eliminate individual income tax on non-wage business income for LLCs, S-corps and sole proprietorships on lines 12, 17 and 18 of the federal form 1040 individual income tax return. The corporate income tax rate would be unchanged.
To help fund the plan, the Governor proposed eliminating itemized deductions and some credits. Additionally, the sales tax rate would remain at 6.3 percent.
House Republican Leadership has presented their own plan, incorporating many parts of the Governor’s plan. The House plan will keep in place the current statutory tax deductions, including the mortgage interest deduction. It lowers the income tax rate as new revenue grows more than 2 percent will buy down the tax rate. It also includes the small business non-wage profit proposal in the Governor’s plan. However, it keeps the statutory sunset with the sales tax rate returning to 5.7 percent.
Senate President Steve Morris, R-Hugoton, formed a tax study group last fall to analyze options for reducing taxes in Kansas in order to create a more business-friendly environment. The bipartisan study group, will be comprised of both senators and members of the public, has held hearings this session.
A Kansas City Star article covering the elimination of the mortgage interest deduction included comments from the HBA.
“Mortgage interest deduction is certainly a cornerstone of homeownership, and it strengthens communities and it puts people to work,” said Corless in the article.
The state conversation on the mortgage interest deduction comes on the heels of NAHB releasing a new poll finding that voters overwhelming favor the federal mortgage interest deduction. The poll shows that three out of four voters – both owners and renters -- believe it is appropriate and reasonable for the federal government to provide tax incentives to promote homeownership. Moreover, 73 percent of voters oppose eliminating the mortgage interest deduction.
If You are looking for more information on Home Builders Association and Building Permit Reports Please visit : www.kchba.org |
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