WASHINGTON Amid a severe housing market slump, Rep. John Dingell is raising eyebrows with a proposal to eliminate interest-tax deductions for owners of big houses.
The Michigan Democrat says doing so would discourage excess energy consumption and lessen emissions linked to climate change.
Dingell said Friday he plans to introduce legislation next month that would eliminate the tax deduction on mortgage interest for owners of so-called "McMansions" houses bigger than 3,000 square feet.
According to the federal government's American Housing Survey in 2003, the latest available, more than 8.6 million homes are 3,000 square feet or more in size nationwide. That number likely increased in the final two years of the real estate boom that ended in 2005.
The real estate industry has long opposed limiting a tax break that many homeowners, especially those looking to shelter higher income levels, cherish.
The housing market's downturn makes this an especially bad time to alter the interest deduction, industry officials say.
Changes to the interest-deduction tax break "would have repercussions for the housing market as a whole," said Mary Trupo, a spokeswoman for the Washington-based National Association of Realtors trade group.
New and existing home sales are down 10 percent from last year's level through July and foreclosures and defaults have soared. The problems are expected to last into 2008.
Consumer behavior, such as buying energy-efficient light bulbs and appliances, is more important than a house's size, Bill Killmer, executive vice president for advocacy at the National Association of Home Builders, said Friday in an e-mailed statement.
"Home size is not a good indicator of the amount of energy a household would use," Killmer said.
A presidential panel two years ago recommended redirecting tax breaks for homeownership toward middle-income taxpayers by replacing the mortgage interest deduction with a 15 percent tax credit. Stiff resistance from the housing industry killed that plan.
Dingell's bill would also hike taxes on gasoline sales by an unspecified amount and impose a new tax on emissions of carbon dioxide, the main greenhouse gas blamed for global warming.
Some experts argue that hiking gasoline taxes is a better way to cut fuel consumption than raising fuel economy standards for cars and trucks, but lawmakers in Washington have typically shied away from fuel-tax increases, fearing voter backlash.
"Properly addressing climate change requires us to address the issue of consumption," Dingell said in a speech to the American Jewish Committee in Detroit. "We do that by making consumption more expensive."
Dingell, a longtime supporter of Detroit's auto industry, insisted that the proposals are not an attempt to publicize the economic costs of fighting the impact of climate change.
"To those who have suggested this may be an attempt to sabotage climate change legislation: you are wrong," said Dingell, a House member since 1955. "I've spent more than half a century in Congress, and I have never introduced legislation with the intention of seeing it fail."
On the climate change front, Congress is considering a range of legislation that would impose mandatory caps on carbon dioxide with an aim of reducing emissions by 50 percent to as much as 80 percent by 2050. All proposals would create a market-based emissions trading system aimed at reducing the cost, and some would provide a "safety valve" that would ease limits if the reductions become too costly.
Dingell said he plans to design such a "cap-and-trade" program that "will enable us to reach the goal of drastically reducing greenhouse gases in a cost-effective and fair manner."