Surrender Monkey Friday: Know What Caused Housing Issues? Lower Taxes
Posted on December 19, 2008
So much surrender to choose from. Bailout-palooza. Dems in a froth over a change in Barry’s Iraq 16 month pullout plan. Dems in a froth over Barry wanting to shift troops to Afghanistan. Dems in a froth over Barry’s political appointments. And so much more. Yet, here we have a quiet surrender, from the New York Times: Tax Break May Have Helped Cause Housing Bubble
“Tonight, I propose a new tax cut for homeownership that says to every middle-income working family in this country, if you sell your home, you will not have to pay a capital gains tax on it ever — not ever. — President Bill Clinton, at the 1996 Democratic National Convention
Ryan J. Wampler had never made much money selling his own homes.
Starting in 1999, however, he began to do very well. Three times in eight years, Mr. Wampler — himself a home builder and developer — sold his home in the Phoenix area, always for a nice profit. With prices in Phoenix soaring, he made almost $700,000 on the three sales.
And thanks to a tax break proposed by President Bill Clinton and approved by Congress in 1997, he did not have to pay tax on most of that profit. It was a break that had not been available to generations of Americans before him. The benefits also did not apply to other investments, be they stocks, bonds or stakes in a small business. Those gains were all taxed at rates of up to 20 percent.
The different tax treatments gave people a new incentive to plow ever more money into real estate, and they did so.
Sounds like a good deal, right? People not being taxed to death on their property by the government. Not in Liberal World
By itself, the change in the tax law did not cause the housing bubble, economists say. Several other factors — a relaxation of lending standards, a failure by regulators to intervene, a sharp decline in interest rates and a collective belief that house prices could never fall — probably played larger roles.
But many economists say that the law had a noticeable impact, allowing home sales to become tax-free windfalls. A recent study of the provision by an economist at the Federal Reserve suggests that the number of homes sold was almost 17 percent higher over the last decade than it would have been without the law.
And the hit parade goes on and on, making a case that reduced capital gains taxes are baaaaaaaad! Of course, any reduced taxes are baaaaaad in Liberal World, and, isn’t it funny that The Messiah wants to raise the capital gains tax in total up to about 28%? Anyone want to bet that we see many more stories about low taxes causing problems, particularly as Barry takes office and pushes for higher taxes?
» Filed Under Barack Obama, Democrats, Dems In Charge: Now What?, Economy, Liberal Media/Bias, Liberal World, News, Taxes
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3 Responses to “Surrender Monkey Friday: Know What Caused Housing Issues? Lower Taxes”
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I just read this article on the NYT online page and saw this and thank you! I hafta comment on this out and out LIE!
If you re-read the article no prominent economist is quoted here. Its all made up liberally biased BS. They tried to make the fact that higher housing sales(the 17% jump) was a “bad” thing. Are you effing serious? And they quoted a no name from the Federal Reserve, a nobody…and they tried to belittle what really made this recession happen, by blaming it on a tax brake. WOW!
If there was an unbiased, non-partisan economist he would unleash Economics 101 on us. Basically, you learn early and often while studying economics that raising taxes HURT an economy, they DO NOT help it.
I cannot beleive how biased that paper is that it would straight lie like that.
See, the problem with our economy isnt Bush’s tax cuts or Clintons elimination of the capital gains tax. It was the gvt telling lendors that they would back loans of people with little or bad credit by co-signing them with OUR tax dollars.
Fannie Mae and Freddie Mac are just as at fault(actually more cuz they are supposed to be overseen by Congress’s financial committee) as all those banks!!!
Big government has caused this problem and its only going to get worse with these bail-out band aids of failing corportae dinosaurs.
After I read the headline and summary all I could think about was how ABSURD this non-story is by the New York Slimes.
Well said above.
To suggest that a tax break in any capacity is negative is pure propaganda. Even on the revenue side, it has been shown time and time again that lowering taxes increases revenue to the federal government.
So why wouldn’t we want to let Americans keep more of their money and have viable means to make money for their retirements?
Lending standards, people buying homes they couldn’t afford, and absurd big government programs like the Community Reinvestment Act led to this mess.
I’m vehemently anti-tax, but their point is valid. The overall tax rate isn’t relevant in this discussion. The key is that housing is given preferential tax treatment (both income & cap gains) and that creates a massive incentive for people to treat their homes as their primary investment vehicle.
It is and should be an investment, but not your primary one. Once you have a suitable home, your focus should be on diversifying the rest of your wealth, not constantly moving to bigger and better place.
Like I said, though, I’m vehemently anti-tax. The correct answer is to remove the tax breaks that create malinvestment and then reduce the overall tax rates by a corresponding amount.