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As president of the Utah Association of Realtors, I must tell you and your readers the ugly truth about the flat tax many policymakers are talking about today. A flat tax that does away with mortgage interest and property tax deductions would have serious consequences for housing and the rest of the economy.

Yes, flatness and simplicity in the tax structure are appealing; however, findings of a recent study by the noted research firm, DRI-McGraw Hill, reveal a scenario too costly to homeowners and the entire economy to justify a simple postcard return.The first year of a flat tax that does away with mortgage interest deductibility and property tax deductions would cost American homeowners valuable equity in their homes. The average homeowner could lose up to 9 percent of the home's value.

The benefits of lower interest rates brought about by a flat tax would be offset by the higher taxes most Americans - especially the middle class - would pay.

The mortgage interest deduction has been an important part of the U.S. tax policy since the federal income tax code was adopted in 1913. This provision has survived world wars, economic depressions and baby booms. By providing for the deduction of home mortgage interest and real estate taxes, Congress recognized the important social and economic value of encouraging home ownership.

Removal of the home mortgage interest deduction could send the economy into a decline worse than even the 1988-92 financial crisis. As home values fell below many outstanding mortgage amounts, pushing many borrowers into default, bank failures and a credit crunch not only become possibilities but probabilities.

The simplicity of a flat tax just isn't attractive enough to outweigh those kinds of consequences.

George Richards

President, Utah Association of Realtors