After failing miserably if their efforts to repeal and replace Obamacare, Republicans are set to shift their legislative agenda to focus on tax reform when they get back from their generous month-long August recess (taxpayers are such great employers). Among other things, proposed changes to the personal tax code would include eliminating nearly all tax write-offs, including those for state and local taxes, and instead doubling the standard deduction.

Of course, potentially no industry would be more impacted by such a move as the housing market which has sparked a slight panic at the National Association of Realtors (NAR). As Reuters points out this morning, roughly 30 million taxpayers taxpayers claim mortgage interest deductions totaling some $70 billion each year which provides a huge incentive to own a home.

The National Association of Realtors issued an "August Recess Talking Points" circular imploring members to remind lawmakers that "Homeowners must be treated fairly in tax reform" to avoid "another housing crash." The group cited a report it commissioned from PwC that estimated home values could quickly dive more than 10 percent if the tax plan becomes law. Currently, about 30 million taxpayers claim the mortgage interest deduction, with about $70 billion in total claims, according to Robert Dietz, an economist with the National Association of Homebuilders. Estimates suggest more than half of taxpayers would stop itemizing under the proposed plan, Dietz said, warning that this would create a large ripple effect through the economy. He said people in early years of a mortgage would suffer most, along with prospective home buyers.

Meanwhile, talking points distributed by NAR, intended to give realtors around the country ammunition against their elected officials while they're 'vacationing' in their districts, warns that tampering with the mortgage deduction could cause "home values everywhere to plunge" resulting in many homeowners once again going "under water" on their primary asset.

- Proposals limiting tax incentives for homeownership would cause home values everywhere to plunge. Estimates provided by PwC show that values could fall in the short run by more than 10 percent if a Blueprint-like tax reform plan were enacted. The drop could be even larger in high-cost areas. It may take years for home values to rebound from such a significant decrease. - With a reduction in values of this size, homeowners with relatively small amounts of equity would again see their mortgages go under water, finding they owe more than what their home is worth. For many, this will lead to defaults, foreclosures, or short sales, creating havoc for families, neighborhoods and communities. - The home is the most valuable asset for most owners. Millions of families have built equity for years with the hope of using it to help pay for retirement or college for children. Many of these dreams would evaporate.

But it's not just the housing market that would be impacted as the CEO of the American Red Cross warned that removing charitable deductions would be "devastating" for non-profit organizations that currently collect some $13 billion worth of tax-deductible donations annually.

Charitable organizations are not arguing against increasing the standard deduction. But they are asking members of Congress to consider creating a “universal deduction,” so taxpayers taking the standard deduction can get additional credit for donations without itemizing. Taxpayers claim an estimated $13 billion each year in charitable deductions. Charities fear giving would plummet if the standard deduction were doubled without creating a universal deduction. Gail McGovern, president and CEO of the American Red Cross, said reducing charitable deductions would be “devastating.”

But it's probably no 'yuge' deal...the U.S. housing stock is only worth about $30 trillion so we're sure the homebuilders and lenders can absorb a small $3 trillion valuation loss, right?