As I've mentioned in previous columns, I entered the editorial side of the publishing business because I learned very early on that I was not put on this earth to sell things.
For example, if I had the monopoly on air conditioners in Southern Arizona, my family would most likely require food stamps to survive. Ditto for heating systems in Minnesota.
I'm not exactly sure why my sales skills are wanting, but my shortcomings have imbued me with a deep appreciation of the good salespeople I've had the pleasure of working with over the years.
And as much as I enjoy watching true sales people practice their craft, I'll reserve a ringside seat for what may be the sales challenge of the decade -- attempting to sell the abolition of the mortgage interest deduction as part of the recommendations put forth by the president's tax reform panel.
Barely a week after the panel submitted its findings via a 271-page report, there have been outcries from mortgage and realty trade groups skewering that proposed reform, claiming that it not only harms the middle class, but that should such a recommendation be adopted, housing prices could plunge as much as 15 percent.
The current mortgage tax break allows homeowners to deduct interest paid during the year on a mortgage up to $1 million and a home-equity loan worth up to $100,000. The break also affords homeowners breaks allowing them to deduct state and local property taxes.
According to estimates, some 36 million taxpayers claimed that deduction in 2003 -- the most recent statistics provided by the Internal Revenue Service.
Under the reform panel's plan, the mortgage deduction would be supplanted with a credit worth 15 percent of interest paid during the year. The deduction for property taxes would also be tossed into the circular file.
Mortgages eligible for the tax break would be curtailed by a set formula that would reflect a regional average of housing prices.
Taxpayers who already own homes would have a five-year span in which to exercise the credit.
Connie Mack, the former Florida Democratic senator explained that fewer than 5 percent of mortgages would exceed the panel's exceed the proposed cap.
But an example provided by the Institute of Policy Innovation involves a homeowner making an annual salary of $50,000 and who pays $10,000 in mortgage interest payments. That taxpayer currently deducts that cost
from his income, so that he pays income tax on $40,000. On a 30 percent tax rate, that person's tax bill would be $12,000.
Conversely, if they take a credit of 15 percent of
the tax obligation directly from the bill, under the tax reform
proposal, the tax bill is now roughly $13,500.
Now to be fair, that's just one example, but it illustrates the constriction of the panel's marching orders from the president of proposing a set of recommendations that are "revenue neutral."
Nevertheless, that part of the reform panel's recommendation may require recruiting far more sales help than Macy's at Christmas.
I can say with reasonable certainty that I won't be getting a call.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access