Ten grand for the land in either example, leaving me 90k for house in either example. If it's existing, I get 90k of house. If it's new, I have to spend 90k on house and tax, so I only get (about) $72,000 of house (with the other 18k going for tax).
In that situation, I want the existing home, because I get to spend the entire $90k on house, not just $72k. I get $18k more house.
I would think it would balance out...Due to the law of supply and demand, the 'used' house would artificially rise in value...A used house will cost more than a new one...
We'll be going back to the time of the Waltons...Grandparents upstairs...Grandkids in the basement...
"In that situation, I want the existing home, because I get to spend the entire $90k on house, not just $72k. I get $18k more house."
Depends on the age and condition of the house. I suspect that in many cases home buyers would chose a newer home that does not require any work and can be customized to their wants/needs. Sort of like today, those that want the new home pay a premium and those that don't buy an older home.
"...A monthly rebate given in advance seems to imply the continued existence of an IRS bureaucracy that keeps track of how much income everybody makes. The rationale for the continuation of such an unnecessary and unwieldy system is cryptic to me...."
Under the current system, the price of all building materials is inflated due to entity level taxation. Once those costs are removed, the price of building materials should decrease...and with the prebate, your full paycheck in hand....you'll probably be able to buy the same house...
The only difference will be that you'll clearly see how much tax you are paying vs our current system where much of the tax cost is hidden from your view.