Wednesday, February 11, 2009

Housing Tax Credit Dropped In Stimulus Compromise?

In what seems to be an absolutely head-scratching move, the $15,000 tax credit for buying a new home seems to have been lost in a tentatively agreed on compromise between the House and the Senate. According to The Huffington Post:

"Working to accommodate the new, lower overall limit of the bill, negotiators effectively wiped out a Senate-passed provision for a new $15,000 tax credit to defray the cost of buying a home, these officials said."

So it seems that Congress continues to tend to the effects, but not to the cause of our ills. Between this brilliant move, and Geithner's lack of specificity in regards to housing yesterday, you really have to wonder when, and if, these people will ever get it!

7 comments:

  1. If they really did drop the $15k, they still have the House's $7,500 that does not need to be repaid. Still not a bad deal in my opinion!

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  2. Is that how it ended up? It is so hard to get solid info.

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  3. From the LA Times. Looks like $7500 credit may make it:
    http://latimesblogs.latimes.com/laland/2009/02/home-buyers-can.html

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  4. A perfect example of bait and switch. First they say they'll offer a 15,000 credit for all buyers and now they take it away. It's ridiculus!

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  5. Not bait and switch at all.... The senate version was fundamentally different. It was hardly available to "all" I imagine that many of the first time home buyers who would qualify for the 7500 would qualify for perhaps half that under the senate plan. The 15000 was NON-REFUNDABLE, so you only got credit if you had the tax basis to subtract it from. So lets say you owed only 700 on your taxes this year, guess what you get back for the new house credit. That's right, $700. Wow that'll really get me stimulated to go buy something else, would barely cover a cheap washer and dryer. It converted something that was for new, first home buyers into something more useful for the upper-middle and upper class (the ones with the tax basis to achieve full value). Assuming it actually works out as reported, it will be better for the little people.

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  6. Oh, and if you want an example of bait and switch, the senate's amendment was proposed by someone who didn't even vote for the bill.

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  7. I don't know how much passing this will help. Economies go through cycles. I read this interesting article on

    http://www.recessioninfocenter.com

    on previous recessions. We just need to adjust I guess.

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