This from my Arizona Republic real estate column (permanent link):
So we started with a $7,500 tax deduction for first-time home-buyers.
But that didn’t juice the real estate market enough, so we bumped the number up to $8,000 and made it a full-blown tax credit. If you owe $8,000 in taxes next April, your slate is wiped clean.
But even that didn’t juice the the real estate market enough, so this week Republicans — the alleged party of fiscal responsibility — proposed bumping the tax credit up to $15,000 and making it available to everyone — including billionaires.
How cool is that? You buy a $150,000 house, you get 10% back when you file your taxes. And you can file an early return to get the money now. And you can even finance the tax credit now and pay it back when you file your return.
You can’t — quite — use the tax credit as your down payment, but that “reform” can’t be more than inches and hours away. And a $15,000 down payment on an FHA loan buys you a $428,500 house.
Unfortunately, that’s more than the FHA limit for metropolitan Phoenix, so that limit will need to be “reformed” as well.
Paying people to buy houses would be insane if we actually had the money to back up our promises. But, since we don’t, these “reforms” are the mark of true statesmanship.
I’m helping an ambitious young couple buy their first home right now. We’re late to close, a common enough situation.
They just had their second child, an event mere bureaucracy cannot delay. Their baby boy — his name is James — is sweet and beautiful, healthy and smart, a perfect specimen of incipient humanity.
They’re taking the $8,000 tax credit, of course, as they should. The government doesn’t become less insane if you shoot yourself in the foot.
But it is sweet little Baby James who will pay for that tax credit, and for millions of others, and possibly for millions more at $15,000 a pop. Our economy runs on theft — and we’re running out of people to steal from.
Brian Brady says:
Atlas Shrugged, Part Two
June 14, 2009 — 11:58 am
Anonymous says:
Greg,
Wrote about this myself. It’s “Pay it Backward”, and sweet baby James won’t be singing when it’s his turn to pick up the guitar and strum.
June 14, 2009 — 8:00 pm
Joe says:
"But it is sweet little Baby James who will pay for that tax credit…"
Hmm, with all the other government giveaways, how about Baby James’ parents, Baby James, and Baby James’ kids.
June 14, 2009 — 9:36 pm
Sean Purcell says:
It never ceases to amaze me how prescient The Simpsons can be.
On how to fix a problem: this, from Season 5: Homer The Vigilante
June 14, 2009 — 10:14 pm
Jessica Horton says:
Sean:
I don’t watch the Simpsons, but my husband mentioned that episode too.
June 15, 2009 — 4:55 am
Scott says:
So will they keep the deadline for 12/31/09 or will they extend that also? The $8k tax credit is very nice and the $15k increase would be nicer especially when banks allow you to finance that. We’ll see how the dems play this one out
June 15, 2009 — 10:15 am
kevin pellatiro says:
Did we just replace a sub-prime mortgage crisis with an inevitable sub-legal tax crash?
((cut to my clients being encouraged to use the credit for all its worth too, grin))
June 15, 2009 — 1:43 pm