Congress may mull ‘carbon tax’ on McMansions

Environmental concerns are behind a new bill that would limit mortgage-interest tax deductions, but real estate groups warn that it could affect prices and stability.

To add to mortgage meltdown miseries, the credit panic, plunging home sales and rising foreclosures, here’s a new worry: a proposed cutoff of mortgage-interest tax deductions for all houses with more than 3,000 square feet.

One of Capitol Hill’s most experienced and powerful legislators is drafting a “carbon tax” bill that would do precisely that. Rep. John Dingell, D-Mich., chairman of the House Energy and Commerce Committee, expects to introduce comprehensive climate change reform legislation once Congress returns next month.

Besides imposing hefty new federal taxes on gasoline,
the forthcoming bill will, in Dingell’s words, seek to “remove the mortgage interest deduction on McMansions — homes over 3,000 square feet.” Dingell said he recognizes that proposals like these will be highly controversial, but he believes they are essential to achieving the environmental goal of reducing carbon emissions by 60 to 80 percent by the year 2050.

“In order to address the issue of climate change, we must address the issue of consumption,” Dingell said in talking points prepared for town hall discussions of the legislation. “We do that by making consumption more expensive.”

Houses, like autos, long have been known to be contributors to greenhouse gas emissions through heating, cooling, electrical usage and building materials, plus the highways and roads needed to make far-flung subdivisions accessible to buyers. Home builders insist that they have “gone green” in recent years, and that houses constructed in the past decade are the tightest, most energy-efficient in history.
v
Aides to Dingell said that because the legislative language on the McMansions and other tax proposals is still being drafted, neither the congressman nor they could elaborate on the details of the plan or why a cutoff point of 3,000 square feet was chosen. The Natural Resources Defense Council (NRDC), one of the most outspoken environmental lobbies active in the climate change debate, had no immediate comment on Dingell’s proposal.

Minneapolis Star-Tribune