Home Builders Association came out with scathing statement against Donald Trump’s tax cut for the uber wealthy few. Jerry Howard, CEO of Home Builders, says it’s going to harm the middle class, business and cause a recession.
Homebuilders CEO Jerry Howard warns tax plan could cause housing recession, says Republicans are putting companies ahead of middle class. pic.twitter.com/ftnuZBIkV3
— Alan Rappeport (@arappeport) November 2, 2017
Two powerful trade associations slammed the GOP's tax plan on Thursday, saying the reduction of a key benefit for homeowners could hurt the market.
The plan would cap the mortgage-interest deduction — which allows homeowners to subtract interest payments from their taxable income — on new homes at $500,000. This could dampen the benefit of the deduction outside of the most expensive housing markets and may lower home values.
On Sunday, the National Association of Home Builders, a lobbying group based in Washington, DC, said it would not support the legislation. When the full text emerged on Thursday, it amplified its criticism.
"The details that are coming out show that the House Republicans are picking large corporations and wealthy Americans over small businesses and middle-class American homeowners," Jerry Howard, the association's CEO, told Business Insider.
Howard estimated that 7 million homes would be excluded from the mortgage-interest deduction, amounting to about a third of the homes in California.
"You're talking about potentially causing housing recessions in some of the biggest markets in the country, and those kinds of recessions tend to have spillovers," Howard said. "We're worried about a national housing recession."