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News Posted on May 26, 2017

Professor Ventry Publishes Op-ed in The Hill on Homeownership under Trump’s Tax Plan

Professor Dennis Ventry published an op-ed in The Hill regarding the mortgage-interest tax deduction, the use of which would be sharply curtailed under a tax plan outlined by President Trump. Housing industry representatives have criticized Trump’s plan, but Ventry writes that it could actually raise homeownership rates over time.

Trump’s plan raises the standard deduction to a level where most people would be better off taking that option rather than listing itemized deductions, and thus wouldn’t use the mortgage-interest deduction. Although that might cause a drop in home prices initially, “positive effects on homeownership rates from lower home prices would more than offset negative effects from loss of the deductions, particularly in high-priced, space-constricted markets,” Ventry writes.  Over time, increased demand would cause home prices to rise again, and “those tens of millions of Americans benefitting from a higher standard deduction could choose to spend their tax-free dollars on homeownership (or, for that matter, education, paying down debt, retirement savings, etc.).”

“To be sure, we need more details of the Trump plan before drawing definitive conclusions about its effect on housing,” writes Ventry. “Moreover, the rough outlines of the larger plan raise serious concerns about the overall distribution of tax savings, its historic revenue losses under the most optimistic projections, and the administration’s ability to sell it to a wary public and Congress.”

“Nonetheless, it is fair to say that Trump’s tax plan could boost homeownership opportunities for lower- and middle-class taxpayers, raise homeownership rates in the long run, and offer Americans a meaningful choice in their consumption and investment decisions.”

Professor Ventry is an expert in tax policy and legal ethics. His research interests include tax expenditure analysis, family taxation, professional responsibility and standards of care, tax filing and administration, tax compliance, public finance, and tax and legal history. In addition, he is Vice Chairman of the IRS Advisory Council, and co-author on the casebook, Federal Income Taxation with Martin McMahon, Jr., Daniel L. Simmons, and Bradley T. Borden.