Washington, D.C. - Despite strong opposition by U.S. Congressman Kevin Brady (R-Texas), Democrats today pushed through legislation that raises taxes on owners of second homes and community real estate partnerships. This despite warnings from  Federal Reserve Chairman Ben Bernanke that the housing industry, damaged by the sub-prime mortgage crisis, is vulnerable and will continue to strain the U.S. economy.

The bill permanently raises taxes on many Americans while providing a scant one year delay of the Alternative Minimum Tax.

“Why are we punishing families who have scrimped and saved their whole lives for a second home? Why are we punishing the local companies that build our apartments, office buildings, shopping centers and industrial parks?” asked Brady. “In the long run these unnecessary tax increases will discourage investment, lower property values and damage resort, retirement and recreational communities across Texas and the nation.”

According to the Joint Committee on Taxation the bill increases taxes by $2 billion on the capital gains from the sale of a second home, whether it is a vacation home, retirement home or an investment. The bill also raised $6.7 billion by doubling the tax on local real estate, energy and venture capital partnerships – a traditional and long-standing business structure for capital investment in local economies.

“Democrats claim they are shooting at Wall Street but in truth they are hitting Main Street. Second homes make up 40% of home sales and the average buyer makes $80,000 a year, so they are really hurting middle-class families”, points out Brady. “Democrats claim they are only taxing the rich, but there are over one million local real estate partnerships – working in nearly every community in America – that will be damaged by this new tax increase.”

Congressman Brady offered an amendment that would have exempted real estate from the tax increase and blocked the new tax on second homes but Democrats refused to allow a vote on the measure.

The controversial bill, H.R. 3996, the “Temporary Tax Relief and Reform Act of 2007,” passed the House of Representatives on a party line vote.