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Burning down the housing tax breaks

September 28, 2009

Government tax breaks and subsidies for housing have staggered our financial system. Naturally, the government prescribes more tax breaks and housing subsidies. Howard Gleckman explains at TaxVox:

There is little evidence that this tax break increases home ownership. And at least some of the subsidy is shared by sellers in the form of higher prices--not a great long-term use of taxpayer dollars.

And he sees the insanity continuing:

At issue: a plan being pushed by the real estate industry to raise and extend the $8,000 homebuyer tax credit that was part of this year’s stimulus bill. That measure is due to expire in November and, predictably, homebuilders and real estate firms would have Congress double down on the subsidy. They’d raise the credit to $15,000, and make it available to any homebuyer through 2010. But make no mistake, come the end of next year, this goodie will end up on the ever-growing wishlist of tax extenders—allegedly temporary tax breaks that become as much a part of the Washington landscape as the Lincoln Memorial.

What he said.