Wednesday, November 4, 2009
As one of my earlier posts noted, the $8,000 tax credit for first time homebuyers was originally a bad idea because, among other reasons, it allowed the same practice (extremely low down payment amounts--as low as 3.5% in some cases) that contributed to the ongoing housing crisis in the first place.
Fortunately, the tax credit was slated to end later this month.
Unfortunately, further proving that no bad idea can't be made worse, Congress is on the cusp of extending that tax credit into next spring as well as expanding it beyond non-first time home buyers.
The Angry Bear blog has a good post on why this is another bad idea that is more likely to benefit special interests than individual residents:
Egads! I can see why real estate professionals and people who will get the windfall would support this. But it is hard to believe that it makes sense to provide more tax breaks for housing, especially when it is only to a select group that just happens to be in a position to purchase this year, who are already likely to get pretty darned good deals anyway, and especially if it includes well-off couples who make almost a quarter million annually (the current credit phases out starting at $150,000 for couples)? Especially when this extension alone will cost us another $17 billion or so.
--Chad Emerson, Faulkner U.