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Mortgage-interest tax break in spotlight

WASHINGTON — Ending tax breaks for oil, corporate jets and hedge-fund managers is nearly every Democrat's favorite way to reduce the federal debt.

But one of the biggest tax breaks is the mortgage-interest deduction, and its benefits are heavily concentrated in a handful of pricey cities, none of which votes Republican.

As Congress' new deficit-reduction committee sets about finding up to $1.5 trillion to trim by Thanksgiving, tax breaks of all kinds, including the interest deduction, are getting new scrutiny. Beloved by the public and the real-estate industry, the deduction will cost the government more than $1 trillion over the next decade.

But few homeowners know how skewed it is by region and by income.

Three metro areas — New York, Los Angeles and San Francisco — receive more than 75 percent of the subsidy, according to a 2004 study by economists Todd Sinai and Joseph Gyourko.

The tax break is available to anyone who borrows up to $1 million for a mortgage — including for a vacation home — or takes as much as $100,000 in a home-equity loan.

The Seattle-Tacoma-Bremerton metropolitan area ranks 20th in net tax benefit per owner-occupied housing unit, at $1,589, according to the study. That is roughly one-third the benefit for a typical New York homeowner and one-fourth that for a typical San Francisco homeowner.

The bigger the mortgage, and the higher one's income, the bigger the deduction. A person in the top tax bracket of 35 percent who borrows $1 million can receive a tax break of $17,500. That's on top of a slew of other subsidies, such as preferential capital-gains taxes on the sale of a primary residence, deduction of local and state property taxes, and subsidies to mortgage giants Fannie Mae and Freddie Mac.

By comparison, those earning less than $75,000 receive less than $200 in savings from the deduction. More than three-fourths of taxpayers do not itemize and so don't claim the deduction. Those who rent or have paid off their mortgages, most of them seniors, get none.

Kitsap Business and Economy » Blog Archive » Bremerton company ...

By Rachel Pritchett

BANGOR — Tompco-Triton, Inc., of Bremerton, has been awarded a $19.5 million contract to renovate the insides of two aging bachelor enlisted quarters at Naval Base Kitsap-Bangor.
The work at the submarine base includes complete renovations of two 70′s-era bachelors enlisted quarters located on the upper side of the submarine base near the gymnasium, exchange and galley. Both are two-story, hotel-style facilities, and house permanently stationed junior enlisted sailors and Marines.
The aging buildings were constructed in 1977 and 1978, and renovation work of this magnitude has not been done since.
An interior remake on one will bring it up to current seismic and energy standards, and will include new antiterrorism features.
The interior on the other building will be totally reconfigured into suites, each containing multiple bedrooms that share dining space, a kitchenette and laundry. The new set-up is more efficient and saves money, according to a statement from the base.
Design work is to begin very soon and the project will be done by spring 2014. Sustainable principles are being implemented.
Tompco-Triton is a joint venture of two Bremerton construction companies, Tompco, Inc., and Triton Marine Construction Corp.
The two firms have worked together on several projects previously and now are finishing up work on an exchange at Naval Air Station Whidbey Island.
“So the timing couldn’t be better,” said Jeff Tompsoncq, Tompco chief executive officer.
Tompco-Triton was one of three bidders on the contract. Tompson received word Monday that the combined company was the winning bidder.

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