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Thank you for participating in the candidate endorsement process of the Greater Dallas Association of REALTORS® (GDAR). The Government Affairs Committee requests that you answer the enclosed questionnaire and return both documents not later than 5:00 p.m. on Monday, January 14, 2002. You may return the questionnaire by mail, fax or e-mail. Responses will be provided to members of the Government Affairs Committee prior to your scheduled interview.
1. This committee is charged with making recommendations to the Board of Directors and Political Action Committee about whether the GDAR will support a candidate's bid for election.
What level and type of support would you want from the Greater DalIas Association of REALTORS® to wage a successful campaign?
Hofheinz response:
I welcome and encourage all legally permissible support from those who support my goals, including financial contributions, campaign volunteer support by individual members, and political action not directly associated with my campaign such as internal organization communications. I will not accept, and will immediately disavow any negative communications of which I become aware. I speak for increased involvement in all forms by all persons, regardless of whether they support or oppose the principles for which I speak, because only in that way can we as a country prevent the appropriation of our government by those who gain from limited involvement and the politics of fear and greed.
How much have you raised to date?
Hofheinz response:
A minimal amount; I did not finally decide it was necessary to run or begin campaigning until the January 2, 2002 filing deadline.
Do you accept PAC funds?
Hofheinz response:
Yes.
2. What are the top three issues facing your district and the country? What specifically will you do, if elected, to address them?
Hofheinz response:
A political culture of fear and greed, rather than courage, compassion, and justice, which discourages involvement by all persons and our use of government for the benefit of all persons.
Fiscal irresponsibility at the federal level.
Misapplication of the federal government to resolve problems properly within the sphere of state governments, and the failure to devote federal resources to problems properly within the sphere of the federal government.
Please visit my website at www.hofheinz2002.org for detailed position statements which reflect these fundamental concerns when applied to particular problems.
3. The Federal Reserve Board and the U.S. Treasury Department are considering a federal proposal that would allow banking conglomerates to operate like real estate brokers by getting into the business of helping customers list, buy or sell a home or property. What is your position regarding the proposed regulation permitting banks to sell and manage real estate?
Hofheinz response:
I oppose such a change, both on practical and policy grounds.
As a lawyer involved in many real estate transactions over the years, I understand the complexity of such brokerage activities, and the training and maintenance of standards required to effectively yet economically represent the varied interests of parties to the transaction. Texas has created an effective system of representing such interests, and requiring those involved in such transactions to have the necessary knowledge to do so. My observation of financial conglomerates leads me to believe that such consolidation of services would lead to an erosion of these protections for purchasers and sellers.
Such consolidation also tends to have negative competitive consequences, requiring additional governmental intervention through regulation to preclude monopolistic actions, rather than allowing market-based competition.
4. President Bush has expressed interest in offering his own version of fundamental tax reform and revisions to the current tax code. In the past, NAR has actively opposed tax reform proposals that would eliminate the mortgage interest deduction. In addition, NAR has expressed concern about any national sales tax system that would impose a sales tax on the purchase or sale of a home. Either proposal would have an adverse effect on real estate transactions.
What is your position regarding the implementation of a flat tax or a national sales tax, in place of the current income tax system?
Hofheinz response:
I believe a progressive income tax best serves the majority of people. Accordingly, I oppose a “flat” tax or a national sales tax.
Would you support or oppose the elimination or limitation of Mortgage Interest Deduction as part of a comprehensive tax reform?
Hofheinz response:
Tax policy presents extremely complex interrelated questions, thus I cannot answer this questions without the particulars of what might constitute “comprehensive tax reform.” I generally believe that tax policy should be market neutral, except where there are substantial societal goals sought to be achieved and government intervention is essential. In such cases direct expenditures cause more accountability than indirect tax expenditures, while on the other hand, indirect expenditures implemented through tax deductions and credits may reduce the administrative overhead of achieving the desired social policy. I believe this question is directly related to that posed in question 8 of the availability of affordable, high-quality housing for all persons. One idea that should be given serious consideration is the replacement or supplementation of the mortgage interested deduction with a refundable housing expense tax credit which could also incentivize the provision of rental housing stock for those not able to purchase a home.
5. Current tax law makes a distinction between capital gain income and ordinary income. NAR has always supported this distinction along with reductions in capital gains tax rates. NAR believes that capital gains cuts would unlock investment, generate additional federal revenues and increase economic growth. Unfortunately, however, current tax laws go further and distinguish between real property and financial assets (i.e./ stocks and bonds) in the taxation of gains. In general, gains on the sale of investment real estate are taxed at a higher rate than similar gains on the sale of financial assets.
What is your position regarding a reduction in the capital gains tax rate?
Hofheinz response:
As noted above, I generally believe that tax policy should be market neutral, except where there are substantial societal goals sought to be achieved and government intervention is essential. I do not believe that the allocation of resources between types of expenditures is such a substantial societal goal requiring government intervention, since those making such decisions directly bear the consequences of those decisions. I oppose reduction in the current capital gains rate since I believe that it adequately recognizes the implicit cost of inflation incorporated into returns from disposition of invested capital.
Would you support or oppose changes to tax capital gains from the sale of investment real estate at the same rate as gains from the sales of financial assets?
Hofheinz response:
I would support such a change in the interest of simplification and neutrality.
6. An important element of capital formation is depreciation. In 2000, the Department of the Treasury released a report indicating that the current law 39-year life for commercial nonresidential property is too long. In addition, the Treasury cited as particularly unfair the rules that require landlords who make improvements (such as store build-out, wiring or technological upgrades) on behalf of tenants depreciate those improvements over 39 years, even though neither the underlying lease nor the improvement will last anywhere near that long. What is your position regarding legislation that would substantially reduce the depreciation period for nonresidential real estate and permits landlords to recover the costs of leasehold improvements over ten years?
Hofheinz response:
I believe that all expenditures should be expensable in full in the year in which incurred, with carry-forwards of amounts not deductible in the year incurred. Such a change, while incurring a present tax cost, would greatly simplify the applicable income tax provisions, would provide additional market neutrality on the current application of available investment resources, and would in the long term provide equivalent tax revenues. Such a change would return to a market evaluation of the useful life of investments as a component of the present application of funds toward investment, rather than an arbitrary governmental determination.
7. NAR is concerned that increased volume of Internet retail sales can erode “Main Street" business environments and also cause shortfalls of state and local sales tax revenues. NAR is concerned that revenue shortfalls could result in increased local property taxes for both residential and commercial real estate. Accordingly, NAR believes that there should be a level playing field between retail sates in a store and retail sales over the Internet. What is your position regarding incentives to state and local governments to simplify their sales taxes so that the goods sold over the Internet are taxed in the same manner as goods sold in a store?
Hofheinz response:
While I agree in principle that there should be a “level playing field” between market participants, our federal system creates a minimum of 50 such playing fields, and with the fractionalized nature of the imposition of sales tax under each state's taxation and local option schemes thousands more such identifiable areas. The internet simply presents a highly visible example of this variation. I believe that federal “incentives” to state and local governments are generally inappropriate. Were action required, about which I have no firm opinion at this time, direct federal legislation requiring interstate sellers to collect local sales taxes would be the appropriate action.
8. Despite a record home ownership rate, one out of every seven American families has a critical housing need, including millions of working families. The stock of rental units that are affordable and available is rapidly declining, with the lack of decent, affordable housing servicing as a significant impediment to local economic growth. NAR believes that the federal government must play a role in stimulating the development and rehabilitation of affordable rental housing and foster a public/private partnership with the private sector to produce housing.
What is your position on increasing government subsidies (appropriations) to help fund the development of privately owned affordable rental housing?
Hofheinz response:
I believe that an ample supply of livable, reasonably priced rental housing is a goal of national importance, and appropriate for federal government action. Many public/private partnerships distort investments while still not accomplishing the primary social policy goal: in this instance ample adequate housing. I do not at this have time have a firm opinion whether additional subsidies, federal lending at reduced rates for such construction, refundable tax credits, or direct rental assistance would have the least undesired consequences while accomplishing the basic goal.
Would you support or oppose excess revenue generated by the FHA single-family program to capitalize creation of a federal affordable housing production program?
Hofheinz response:
All general revenue of the federal government should be treated as coming out of “one pot,” thus I would oppose the dedication of this particular type of revenue to any particular type of expenditure.
9. The National Association of REALTORS® is a strong supporter of the rights of individuals to own and transfer real property. NAR believes that land use, environmental and natural resource regulations must not violate the rights of property owners. What is your position on a law that would streamline access to the federal courts in 5th Amendment private property cases to allow property owners quicker adjudication of their cases?
Hofheinz response:
As a lawyer who has represented clients over the past twenty-two years, it is my experience that the procedural due process inherent in litigation is inherently time consuming. A goal of the federal (and state) judicial system should be to provide prompt adjudication of controversies of all sorts, including these. My personal litigation experience suggests that it would be extremely difficult to expedite the disposition of such cases while still retaining fundamental fairness to all participants, even through the application of additional court resources on a preferential basis or other changes.
Please return by 5:00 p.m. on Monday, January 14, 2002 to: Greater DalIas Association of REALTORS® Attn: Government Affairs Department 8201 N. Stemmons Freeway DalIas, Texas 75247 or fax to: 214-630-6242 or E-mail to: skaplan@gdar.org
Walter Wm. Hofheinz
2401 Turtle Creek Blvd.,
Dallas, Texas 75219
214.363.2400
walter@hofheinz2002.org