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posted: 12/21/2012 5:26 AM

The nation's housing: On deduction, the polls are mixed

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WASHINGTON -- In the congressional and White House negotiations on tax reform -- including the mortgage interest and property tax deductions -- who has the crucial political advantage of counting documented public opinion on their side?

Is it the real estate and building lobbies who argue that maintaining long-standing federal tax benefits are essential, given housing's key role in job creation, household wealth and the fact that real estate is still in a fragile state coming out of the recession and mortgage bust?

Or is the "cut the debt" proponents and economists who see mortgage write-offs as unnecessary, costly and heavily tilted to favor upper-income owners, especially along the East and West Coasts?

In debates on tough issues like these, advocates invariably point to public opinion surveys that show members of Congress where their constituents stand, and implicitly how they should vote. That process is already well under way on Capitol Hill as the tense debt, tax and budget negotiations head toward the Dec. 31 "fiscal cliff" deadline.

But the polls can be confusing. On the one hand, a new survey by National Journal, a publication widely read on Capitol Hill, found larger numbers of Americans willing to limit both the mortgage interest and property tax write-offs than housing proponents suggest.

The poll of 1,001 adults, jointly sponsored by United Technologies Corp. and released Dec. 11, found that 41 percent of respondents favor reducing the deductions for all homeowners, no matter their income, and another 21 percent favor limits on taxpayers earning more than $250,000 a year. Just 31 percent favored retaining the current system, which allows write-offs on up to $1.1 million in mortgage and home equity debt on primary and secondary homes.

The same survey found roughly similar opinions on the property tax deduction: 42 percent of respondents said they favor limiting it for all owners, 19 percent support reducing it for high-income households, and 31 percent favor no change in the system.

How to interpret these results? One way is to conclude that despite the housing industry's claims to the contrary, there appears to be noteworthy public opinion support for reducing current mortgage interest and property tax benefits, especially for taxpayers with the highest incomes.

But hold on here. The National Journal doesn't have the only poll on the subject. Earlier this year, the National Association of Home Builders commissioned a survey of 1,500 likely voters by a bipartisan pair of pollsters -- Republican-leaning Public Opinion Strategies and Democratic-leaning Lake Research Partners. That survey found that 73 percent of respondents were either strongly or moderately opposed to eliminating the mortgage interest deduction and 62 percent opposed any reduction. The same poll found that a much slimmer majority -- 54 percent -- opposed new mortgage deduction limits on households earning $250,000 or more.

Wait. There's still another new poll to add to the mix. On Dec. 13, the Pew Research Center released a national sampling of 1,503 adults. It found that although a majority of Americans favor limits on tax write-offs in general, and 69 percent favor raising tax rates for households earning $250,000 and up, only 41 percent support cutting back on mortgage interest deductions. Fifty-two percent said they are opposed. Among Democrats, 45 percent favored limitations. Among Republicans, just 35 percent were willing to support cutbacks.

So what to make of these conflicting results? Jerry Howard, CEO of the National Association of Home Builders, argued in an interview that multiple public opinion polls -- the National Journal's new survey notwithstanding -- consistently have shown that a majority of Americans are opposed to limiting mortgage interest and other deductions. "There's no question," he said, and the politicians on Capitol Hill should give heavy weight to the public's views on the subject.

Which views -- and which polls -- they ultimately side with is still up in the air. But if you had to bet on the matter, you might consider this: President Obama's position for years has been to limit housing and other deductions for wealthier taxpayers while leaving write-offs intact for everybody else. That tracks fairly well with polling results that suggest voters are more willing to cut tax breaks for upper-income folks but are reluctant to impose reductions on others. Doing so would trigger battles with housing proponents, who'd call in every political chip at their disposal on Capitol Hill.

But if compromises are needed to get to a debt reduction deal -- and they will be -- it just might be the way it all ends up.

• Write to Ken Harney at P.O. Box 15281, Chevy Chase, MD 20815 or via email at kenharney@earthlink.net.

2012, Washington Post Writers Group

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