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BUSH ON MORTGAGE TAX BREAK BANDWAGON

December 07, 2007

The President joined the panic over the subprime mortgage debacle yesterday. His bad ideas include two tax provisions: tax-exempt mortgage bonds and exclusion of debt forgiveness for solvent taxpayers.

The Tax Policy Blog offers some badly-needed perspective:

Effective Tax Rate on Capital Income = 13.8 percent

Effective Tax Rate on Capital Income Derived from Owner-Occupied Housing = - 5.1 percent

Yes, that's a negative effective tax rate.

And if you lose your gamble on real estate and interest rates, the president wants to make it lower still.

The TaxProf has more.

Tags: debt forgiveness.tax policy.

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