Tags: Trump | Tax | Loopholes | Housing

Trump: Scrapping Tax Loopholes 'Catastrophic' for Housing Industry

Tuesday, 17 April 2012 09:49 AM

Calls for lowering taxes rates but closing loopholes are growing, but leave the housing sector out of it at least for now, says real estate mogul Donald Trump.

Advocates for tax reform say lowering the maximum tax rate — both individuals and corporations — is possible via closing loopholes and deductions.

Some say cutting out mortgage deductions could pump fresh revenues into government coffers without raising taxes on any demographic.

Not now, says Trump.

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here

"You have a lot of loopholes out there but at the same time it's very tricky. Like as an example, taking away the interest deduction — that's just what the housing market needs right now is another hit," Trump tells CNBC.

"Give it one more nice big hit like that, that will be wonderful for the housing industry. You have to get the housing have industry going, and whether or not you do that in the future is one thing, but to do it right now, I think, would be pretty catastrophic for the housing industry."

Calls for spending cuts to narrow deficits are widespread, but some argue increased revenue will be necessary if the country is serious about streamlining its economy.

"We're going to have to have more revenue. It's simple math," David Walker, former Comptroller General under President George. W. Bush and advocate for tax reform, also tells CNBC.

Unfunded liabilities are so massive that spending cuts alone won't solve the country's fiscal woes.

"The reason being is we have over $50 trillion in off-balance sheet obligations, $37 trillion for Medicare, $9 trillion for Social Security and those numbers grow faster than inflation and faster than the economy when the economy grows," Walker adds

Republican presidential hopeful Mitt Romney has said he'd consider scrapping tax breaks on second mortgages.

"I'm going to probably eliminate for high income people the second home mortgage deduction," Romney said recently, NBC News reports, adding that the candidate would also likely eliminate deductions for state income and property taxes as well.

"By virtue of doing that, we'll get the same tax revenue, but we'll have lower rates," Romney said.

"The nice thing about lower rates is that small businesses not get to keep a larger share of what they're earning and plow it back in to hire more people and expand their business."

Some argue closing loopholes on second mortgages will hurt the upper middle class, as the wealthy can just buy properties outright without financing them via taking out mortgages.

"You're trying to figure out ways to pare back deductions without hitting people who really need them," says Roberton Williams, a senior fellow at the nonpartisan Tax Policy Center, ABC News reports.

"Relatively few people own these," Williams says.

Editor's Note: Obama Donor Banned This Video But You Can Watch it Here

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