We now are being told of another brilliant idea coming from those with too much time on their hands serving in our federal government. We started with ethanol for vehicles when there is only one service station in CA that sells the E-85 fuel.
Our most recent “brilliant” idea comes from Rep. John Dingell (D-Mich.), chairman of the House Energy and Commerce Committee. He plans to introduce a Bill to end the mortgage tax deduction on homes measuring over 3,000 square feet. Some are calling this the “McMansion” Bill which will hopefully reduce greenhouse gas emissions.
In a discussion about the real estate market in Orange County with Supervisor John Moorlach yesterday he called it “a train wreck in slow motion coming up.” We have all read that developers are slowing down plans for their high rise buildings in Anaheim and Irvine. John said “they (the developers) don’t know who is going to buy them.” He told us that “assessment appeals are up 50 percent from last year” and that “foreclosures have quadrupled in the past year.” Stated differently John said that “one out of every 359 O.C. homes are in foreclosure.”
So while “30 percent of the County economy is dependent on real estate” Representative Dingle is proposing a solution that will drive the market further down a very slippery slope.
While builders try to unload their current inventory of unsold homes we want to help them out by removing a buyer tax credit on larger homes. I find this to be very amusing and timely when President Bush just proposed a bail out for 80,000 subprime mortgage holders.
So for all those who purchased 3,000 square feet plus homes over the past 30 years, for which they are still paying off a mortgage, will they be grandfather protected?
The Washington Post recently reported that: “The interest deduction is one of the biggest tax benefits in the federal budget, according to the congressional Joint Tax Committee. Between fiscal 2006 and 2010, according to a committee study, federal revenue losses attributable to the mortgage-interest deductions are expected to total $402.7 billion.
Other federal studies have documented that the benefits of the write-off are heavily skewed toward higher-income taxpayers who have larger-than-average mortgages. “
The Post article reads that “home builders insist that they have “gone green” in recent years, and that houses constructed within the past decade are the tightest, most energy-efficient in history.'” My sense it that these larger new homes generate less greenhouse gas emissions that older 2,000 square foot homes but who am I to lower the bar as to who is to be punished.
So I guess this “ding-bat” idea is really to punish the wealthy while claiming it will reduce greenhouse emissions. All of those Hollywood moguls, producers, leading actors and sports stars living in these McMansions will really be hurt by losing this tax deduction? However, will it impact the greenhouse fix?
I’m betting it will not fly. What do you think?
Larry, it is very simple. Think of this in business terms; we are a revenue stream, which the powerful politicians tap into whenever they wish to redistribute the wealth of those who have dared to succeed in life.
Regardless of what you make, it is yours. Not some pinhead hack in Washington.
We all deserve to be free from onerous taxes that limp wristed politicians saddle us with when they can’t budget correctly or when they want to pander to some “group” to get votes.
These politicians know no depths of depravity to which they will go in order to get their hands on your money.
And that goes for the pouges at the local level. Thank God sound minded individuals got together in Fullerton and recalled their city council for passing a Utility Tax, In La Habra, it took almost ten years for their citizens to finally say enough is enough and vote out their Utility Tax.
We can only hope that this type of rebellious behavior infects others and becomes an epidemic in our country.
3000 s.f. proposal aside, the mortgage deduction needs to be reformed. Aren’t we at war? Don’t we have ridiculous deficits? The mortgage deduction is the equivalent of the Mexican political parties passing out bags of beans & rice during the election season. We’re bought!
email response:
I kind of like the idea, I think primarily because it would hit all those Hollywood liberals and big bucks know it alls with their jumbo houses and private jets who want regular folks to ride buses and eschew incandescent light bulbs while they take token, high profile steps like driving a Prius for photo shoots. Ooooo, now there’s an idea: ban private jets along with taxing conspicuous consumption. I don’t necessarily like the idea of doing all that, just the idea of making some of those holier than thou types think twice.
Another email response. This is from a realtor:
Larry,
Dingle is a socialist as are most democrats. We need to get out of the ditch of bad loans asap. Home prices have tumbled enough.
You guys are going to look back
at the day…that 3000 sq. ft.
was the bar to climb over. This
Real Estate market may not recover
for four to six years! The politicians are all going to look
like they have Montezuma’s Revenge!
That “Mansion Number” will be far
less for Condo’s, Beach Property,
and High Rise! This is just the
beginning! Welcome to Hillaryville!