First time home buyers can deduct the interest they pay on their mortgages under President Trump’s tax plan. Today, homeowners who itemize deductions on their tax return may deduct the interest they pay on mortgages worth up to $1 million combined for their primary residence and secondary home. They also may deduct the interest on up to $100,000 in home-equity loans, unless they’re subject to the Alternative Minimum Tax.
The mortgage interest deduction encourages middle class home buyers to purchase homes that are moderately priced homes. The tax-reform bill now making its way through Congress can expect economic growth to accelerate to roughly 3.2 percent for the next three to five years, then settle in at a sustainable pace of around 2.5 percent. Current estimations for long-term growth of about 1.9 percent.
Lawmakers and tax writers are looking to replace some of the revenue they’d lose from the trillions in tax cuts they want to make. And the mortgage deduction is one of the most expensive tax breaks on the books, estimated to cost more than $80 billion a year over the next decade. Lowering the mortgage deduction cap could help pay for major tax cuts for businesses and individuals that the GOP lawmakers see as a vital factor for driving economic growth. The plan starts with pro-growth tax reform which helps American workers and businesses keep more of their hard-earned dollars. Trump’s proposed plan will lower rates for Americans in every tax bracket, simplify the tax code, and reduce the U.S. corporate tax rate, which is one of the highest in the world.
An important initiative is fixing a tax code that is outdated, overly complex, and too onerous. It’s time to unleash America’s economy, creating millions of new jobs and boosting economic growth.
President Trumps plan is broken down into several different points. First bringing middle class tax relief by permanently reducing rates. Second, assisting businesses with a tax plan which gives business the ability to be competitive again. Eliminating loopholes, creating a system that is simple, fair, and easy, which is typically the last way people would describe taxes.
The new code would be one page long if passed, in comparison to thousands of pages in the current code. One of the benefits of the tax plan on the individual side, in particular, is by expanding the standard deduction to $24,000 for a married couple. It effectively creates a bracket of zero taxes for many Americans. That is good news for middle class Americans and Stanly County residents. Reforming the tax code is instrumental in reviving our economy, and it needs to begin with those who are buying homes. If the tax plan goes as planned we’re going to see more and more Americans get some relief that they so desperately need in regards to making ends meet.
President Trumps entire campaign was about the American worker instead of special interest groups. His special interest is the American people, and making sure that whether it’s putting more money in their pocket, or making sure that they economic growth leads to more jobs and greater manufacturing, that’s the one interest that he’s fighting for. This is important for Stanly County, not just for home buyers, but for home builders and anyone whose work is related to building or construction, with this deduction people can spend more. Under the proposed framework, the first $12,000 for a single individual and the first $24,000 for a married couple, will be tax free. The new plan makes the zero bracket bigger and gets rid of the 10 percent bracket, and it reduces the 15 percent rate down to 12 percent. The framework also provides relief to those who care for an adult dependent or elderly loved one through a $500 tax credit.
The framework ensures that the benefits of tax reform go to the middle class, not to the highest earners. As part of the effort to make the tax system simple and fair, the proposed bill eliminates the unfair estate tax, sometimes known as the death tax, which will have a local impact. The bill benefits the middle-class, which helps the Stanly County community tremendously.