In order to have PAID $15,000 in Federal taxes, a married couple will have to show AFTER DEDUCTIONS income of more than $90,000. This basically means that FULL advantage of the $15,000 tax CREDIT only goes to households with incomes in excess of around $110,000 (assuming around $20,000 in deductions). These people are the ones already bringing home the bacon, and they should probably have SOME money set aside that they can use to go to the Home Depot and buy things for their new house -- if not, then they probably can't afford to buy one, even if the bank and government will qualify them.
Yes, people with lower incomes would be able to take advantage of the tax CREDIT, but ONLY up to the amount of tax they actually pay. Remember, it's not a $15,000 HANDOUT. It's just a tax CREDIT. A married couple with $75,000 in income, and $20,000 in deductions would have an after deductions income of $55,000 and their tax assessment would be $7,500. $7,500 is ALL they'll get back, and only AFTER they file their taxes for the year they purchase a home. Like 6 or 12 months after they buy it. I can tell you, they're going to need that lawn mower well before then. Hmmm.
Now $7,500 is the lower amount that's in the House bill. Basically the tax credit seems to have been calculated so that people in the low to low-mid income levels can take full advantage of it. But it's another scam, not only because a huge percentage of those people can't afford to buy houses, but also because the people making more money than $90,000 a year probably will qualify to get the $7,500 too. So you can bet that the people making $500,000 a year will make sure their accountant applies for their $7,500 rebate after they buy their $6,000,000 house.
So why shouldn't everyone buying a house get a $7,500 (or $15,000) tax credit, even if they're stupid enough to pay an extra $95,000 to get it? Well, if people swapping houses are paying less taxes, then where is the government going to get the money they need to provide for roads and schools and health care and assistance to the unemployed and homeland security and all the other things that are supposed to be done with our tax dollars for ALL of the citizens, including those who don't plan to buy or sell a house this year? The government's money has to come from someplace, and with businesses closing down and reporting losses, those tax dollars sure aren't going to be rolling in from corporate profits for a while.
The answer to our bleak financial times? House-swapping, no.
INVESTING in real estate, perhaps yes. That's what the government (and the Realtors, banks, Home Depot and Lowes) should be encouraging. People with $95,000 cash who already own a home should go to foreclosure auctions, see if they can pick up something for around $75,000, pay cash, fix it up with the other $20,000, and rent it out. Then they'll have a nice income they can use to start to pay off their own under-water mortgage. And they'll be improving a neighborhod by removing a foreclosure sign and filling an empty house. THAT'S the best deal for the American homeowner.
I'm hoping Suzie Orman would approve. If you agree, print this out, send it to your Senator and Congressman, along with a $2 calculator, and tell 'em to do the math.
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