Congressman Tim Bishop is leading the effort in Congress to protect the tax deductions for mortgage interest and charitable contributions from being reduced or eliminated next year. Last week, Bishop offered an amendment to preserve the deductions in a tax reform package to be considered under expedited procedures in the House in 2013; however, Bishop's amendment was defeated on a party-line vote.
"My Republican colleagues are committed to lowering tax rates for millionaires, but they refuse to protect two of the most important, popular, and widely supported deductions in our tax code for middle class families," said Congressman Bishop. "The GOP needs to go on record: what tax benefits for the middle class it will sacrifice to provide another rate cut for the wealthiest?"
The Ryan budget resolution passed by House Republicans earlier this year calls for an across the board income tax rate cut, with the resulting drop in revenue to be offset by closing loopholes and capping or eliminating deductions. The Ryan Budget is intentionally vague about the specific changes it would make to tax provisions currently on the books.
Bishop said that the mortgage interest deduction is vital to the health of the housing market, and that eliminating or reducing it would undermine the economic recovery.
"Because the value of the mortgage interest deduction is capitalized into the price of housing, curtailing or eliminating it would reduce the value of housing across the United States, put more homeowners underwater, and take the wind out of the recovery," Bishop said last Thursday in a speech in support of his amendment.
Bishop also said the tax deduction for charitable giving should be protected as social service organizations are strained by government budget cuts and increased demand for services. Bishop recently visited Long Island Cares, Island Harvest, and United Way YouthBuild, leaders in supporting Suffolk County's social safety net, to understand first-hand how budget cuts and increased demand will affect them and the vulnerable populations they serve. Bishop also cited a recent report that eliminating the deduction for charitable contributions would result in loss of as much as $150 billion, or 69 percent, in annual giving.
"Our Republican colleagues have proposed deep cuts to SNAP, child nutrition programs, affordable housing, and job training. Now, they have voted to create another obstacle for organizations that, by their own reckoning, should fill the void of reduced federal investments for social programs," Bishop said.