Archive for the ‘Housing’ Category

Rethinking Homeownership Subsidies

Tax expenditures for homeownership, such as deductions for mortgage interest and property taxes and the partial exclusion for capital gains on the sale of a primary residence, have long been recognized as ineffective, regressive, and extraordinarily expensive—costing $121 billion in 2013 alone. Until now, most reforms—including the Bowles-Simpson deficit-reduction plan—have focused on restructuring the mortgage […]

What Changes in the Mortgage Deduction Would Mean for Home Prices

Tax preferences for housing are under fire, with mounting evidence that these preferences are inefficient, unequal, and too expensive to warrant a place in the tax code. Critics of proposed changes in the tax treatment of home ownership argue that these reforms would slash home prices at the very time they are showing signs of […]

How to Improve the Tax Subsidy for Home Ownership

Last week, at the request of the House Ways and Means Committee, I testified on how Congress could reform the mortgage interest deduction, a popular tax expenditure provision with a big sticker price. The congressional Joint Committee on Taxation estimates the mortgage interest deduction will cost $380 billion over the next five years, making it […]

Is This a Good Time to Reform the Mortgage Interest Deduction?

Housing industry lobbyists often make the case that, whatever you think of the mortgage interest deduction, now would be a terrible time to eliminate or restructure the subsidy. After all, they say, the housing market remains so shaky that ending the deduction would send home prices back into a tailspin. However, there is a contrary […]

Using Tax Exempt Bonds to Demolish Homes: Another View

Last week, I blogged about a plan to use tax-exempt bonds to finance the demolition of vacant homes in distressed Midwestern neighborhoods.  Rolf Pendall, director of the Urban Institute’s  Metropolitan Housing and Communities Policy Center, has a different perspective: I agree entirely that a piecemeal approach to the current crisis isn’t appropriate and that the […]

Should Muni Bonds Pay To Demolish Buildings?

Two Ohio Members of Congress have introduced a bill to allow states to issue tax-exempt bonds to demolish buildings. Not to build them, but to destroy them. Score this one as a bad solution to a real problem. The lawmakers, Republican Steve LaTourette and Democrat Marcia Fudge, want to allow state governments to issue up to $4 […]

There is No Health Care Tax on Most Home Sales. Really.

It is the unfounded rumor that never dies: You will have to pay a 3.8 percent federal health care tax on the sale of your house. For all but a handful of taxpayers, this is not true. It is wrong. It is urban myth. It is the revenue equivalent of death panels or the Halliburton […]

Not All Tax Breaks Are Created Equal

It has become fashionable (I am happy to say) for  politicians to talk about ending or at least scaling back tax subsidies. But  pols mean very different things when they say this. And new analysis by the Tax  Policy Center shows that whether they help you or not often depends on how much  money you […]

Rx for a Double-dip Recession: Cut Government Spending by 15 Percent

Apparently nostalgic for recession, more than 100 House Republicans have proposed to cut federal spending by $550 billion in 2012. The Republican Study Committee (RSC) doesn’t ever quite say this is their plan, but it is. One hardly knows where to begin. This is an amazing number. It implies a 15 percent reduction in government spending […]

How Not to Fix the Housing Market

The American housing market is in trouble. Prices continue to fall, many would-be buyers can’t qualify for mortgages, sales remain sluggish, and the backlog of potential foreclosures continues to grow. The benefits of the temporary tax credits offered in 2009 and 2010 have long since worn off. Meanwhile Congress is working to revamp Fannie Mae […]