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Our position.

BUILDER's story on the flat tax unfortunately is misleading and incorrectly presents NAHB's views on tax reform. Let me comment in three specific areas.

First, BUILDER's story focuses entirely on a single idea - the flat tax - and ignores numerous other tax reform proposals being discussed, including House Ways and Means Committee Chairman Bill Archer's (R-Texas) proposal to replace the current income tax with a consumption tax. While Rep. Dick Armey's (R-Texas) flat tax gets all the attention, Archer cannot be forgotten because he chairs the principal tax-writing committee in Congress.

To look at it another way, the BUILDER article took a complex issue and turned it into a simple two-sided debate: those supporting the existing tax system against those in favor of the so-called "flat tax."

Shades of gray. In reality, there are many shades of gray in this debate over tax reform, with more than a half-dozen proposals, including Archer's, already on the table and likely to be debated during the upcoming presidential campaign. Depending on the response of the American people, we could see major tax reform initiatives start to work their way through Congress as early as 1997.

Second, BUILDER virtually ignored the fact that NAHB launched a major effort last summer to educate our members about tax reform. This effort included a series of articles published in our biweekly newspaper that examined the pros and cons of various proposals and major debates on tax reform at NAHB's board of directors meetings. After much debate, NAHB's 2,000-member board adopted two resolutions supporting the preservation of the mortgage interest and property tax deductions and other tax incentives for housing.

Instead of covering this debate, BUILDER reached the conclusion that "many builders support the flat tax" based on 82 people who responded to a survey. Publishing the results of a survey based on 82 responses out of more than 150,000 BUILDER subscribers is irresponsible journalism. Who do you believe better represents the industry's views - 2,000 elected builders who serve on the NAHB board of directors, debate the issues, and adopt policy positions for the association, or an unscientific poll of 82 people, including one airline agent, who read BUILDER?

The real story. Finally, BUILDER reported that NAHB opposes the flat tax and tax reform. That's not true. In fact, NAHB has and will continue to support efforts to reduce tax rates and to make the tax system simpler, more efficient, and indeed "flatter."

However, we believe these goals can be achieved without eliminating the mortgage interest or property tax deductions. We believe tax reform can be achieved without throwing the baby out with the bath water.

If tax reform means wiping out more than $1 trillion in equity for America's 62 million homeowners, causing home values to drop an average of 15 percent, triggering a collapse in sales and construction, and possibly throwing the entire economy into a deep recession, then you can bet NAHB will oppose it. If, on the other hand, the goals of simplifying the tax system and reducing tax rates can be achieved without turning the economy upside down and penalizing homeowners, then you can expect your association to support it.

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Title Annotation:National Association of Home Builders of the United States' comments on the flat tax proposal
Author:Smith, Randy
Date:Feb 1, 1996
Previous Article:Tax reform and housing.
Next Article:Split verdict.

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