The author is either completely misinformed, or 100% wrong. Either way, he dumps his credibility by opening his piece with this falsehood. The HoR voted to extend the deadline of the tax credit ($8,000 for new home buyers, $6,500 for buyers who had lived in their previous homes for at least 5 years, with income cap limits for both categories) beyond 30 June IF and ONLY IF they had sold their homes by 30 April but were unable to close by 30 June. That's it. There were too many people trying to close by the 30 June deadline, and ran into problems with loan qualification deadlines, appriasals, and all the other trappings of closing. The tax credit was NOT extended. Only the paperwork deadline for those who had already sold by 30 April.
According to the Office of Management and Budget (OMB), the mortgage-interest deduction is expected to cost $637 billion over the five years ending in 2015. The exclusion of capital gains on primary residences is expected to cost another $215 billion over the same five years, with the deductibility of state and local property taxes on owner-occupied homes adding $151 billion. In total, these subsidies will reduce federal revenue by well over $1 trillion over a decade during which the federal government is expected to run a $9 trillion deficit. A gradual phase-out of these subsidies is therefore not only smart economics, but a fiscal necessity.
This just drives me insane.
So, let's try and buy into his rationale: the government should be allowed to steal more of people's money via confiscatory taxation, because it is somehow justified that allowing people to keep their own money "costs" the government too much? People get to be taxed LESS because they are allowed to deduct interest on mortgages, and he is arguing for the government to eliminate this and take MORE of people's money?! Great. Just great.
He tries to argue that with the debt and deficit, we can't "afford" this tax break - and implies it will go to paying down the national debt, and/or reduce annual budget deficits. Good luck with that one.
Here is a brilliant clue he seemed to miss: when the home buying tax credits stopped, the market reacted vehemently in the negative. SURPRISE! The government temporarily decided to take LESS of people's money at the point of a gun, and the market reacted favorably. As soon as Uncle Sugar elbowed his way back into the room to demand more tax money for his pockets, the market dries up.
Gee....this is hard to fathom......
He has some good points: not everyone should have a house. We can thank liberals for trying to "give" every moron a mortgage they could not afford. But eliminating tax deductions for current home owners is stupid and will hurt everyone.
Which is precisely why it will probably happen.
God help us all.