The Mortgage Bankers Association of America is appealing to homeowners in its fight against a flat tax that would eliminate the mortgage interest deduction.

A new study by the Washington-based Secura Group, done for the trade association, shows that low-income taxpayers would pay 2.5 times more in taxes if a 20% flat-tax proposal, introduced by House Majority Leader Dick Armey, R-Tex., were enacted.

Middle-income taxpayers with an adjusted gross income of $50,000 to $74,999 would see their taxes jump by 11.9%.

Paul Reid, president of the trade group and chief executive of American Home Funding Inc., Richmond, Va., warned that a flat tax would significantly depress home prices and lower the rate of homeownership in the U.S.

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