Friday, October 30, 2009

"Fool Us Once, Shame on You; Fool Us Twice..."

Other views:
  • Kay Bell

  • Joe Kristan

  • Peter Pappas

  • Treasury Secretary Timothy Geithner and HUD Secretary Shaun Donovan have called for an extension of a modified Homebuyers' Credit through the second quarter of 2010. Among the changes proposed: extending (at a reduced amount of $6,500) the credit to non-first time buyers, increasing income levels to $250,000 MFJ and $125,000 otherwise and adding antifraud provisions including an age test and documented proof of purchase. Support appears to be present from three Senate powerhouses: Chris Dodd (D-CT), Mitch McConnell (R-KY) and Harry Reid (D-NV) and from two Georgia representatives: Johnny Isakson (R) and John Lewis (D).

    According to standard political theory, the only supporters who might make some sense are Izakson and McConnell, since Republicans are supposedly the party of "special interests" and the three biggest beneficiaries of this legislation are bankers, land developers and realtors. Even without the fraud component of the present credit, the Homebuyers credit was on iffy ground as a tax expenditure; given the fraud history and expansion of qualifying parties--thus adding to the revenue loss at a time where new taxes and tax hikes are being floated as trial balloons almost every day--it is hard to see how this extension could be a good idea for the taxpaying public as a whole.


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