Mortgage Compliance

Will Tax Reform Affect Housing?

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tax-relief-gop-saltThe debate rages on. Who will really benefit from the current tax reform proposals? Some say the rich, some say the middle class, and others say the big corporations. Maybe, it’s all three.

One big question revolves around the elimination of the SALT deductions. Critics argue this is “double taxing” that would hurt the middle class. Others say, not so fast, amigos.

The majority of taxpayers do not itemize, so they get no benefit from any SALT deductions. However, a doubling of the standard deductions, the lowering of marginal rates on personal and pass-through income, and an increase child tax credits would provide a tax cut for these filers. That means that more of the middle class will retain more money each week in their paycheck.

That’s a good thing for them, the economy, and housing.

 

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Yes, some taxpayers in the higher income bracket, who do itemize, in states with higher taxes may see a slight tax increase. That’s because other taxpayers throughout the country, in states who hold the line on taxes, are paying to subsidize the current SALT deductions. Is that fair?

These taxpayers may still benefit as the proposed reforms will allow the majority of taxpayers and businesses to retain more of their earnings, bolstering the economy, leading to more and better jobs, and higher wages. That benefits everyone.

Maybe an elimination of the SALT deductions will force all states to be a little more fiscally responsible when it comes to raising real estate, income and/or sales taxes. That would benefit those who now live in such states.

Seems to me that, for a change, the federal government is trying to do something good for all taxpayers. Maybe the states should do the same for their taxpayers.

Michael Vitali

About the Author

Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.
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Michael Vitali

About Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.
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