Shea-Porter urges extension of home buyer credit
Here is the text of a letter Rep. Carol Shea-Porter has written to Nancy Pelosi and Steny Hoyer urging the extension of home buyer tax credits:
Dear Speaker Pelosi and Majority Leader Hoyer:
I write to urge that the House of Representatives take quick action to extend the tax credit for first-time home buyers, including the important changes made in the Recovery Act, and consider including a smaller credit for other home buyers as well. In these tough economic times, Congress must continue to enact sound fiscal policies that help our economy recover. The Recovery Package is working, and we should not let this important tool expire.
The tax credit for first time home buyers has obvious benefits for the housing market and the economy as a whole. Some 400,000 home sales have been directly attributed to the tax credit. Those purchases lead directly to increased sales of home appliances, furniture, and other household items. The National Association of Realtors has estimated that every home purchase injects more than $60,000 into the economy. All of this leads to companies retaining or creating more jobs. Creating a smaller tax credit for other home buyers could lead to even greater economic benefits and job creation.
The 111th Congress has faced uncharted economic territory. Congress must continue to carefully weigh the benefits and costs of every piece of fiscal policy. I believe the tax credit for first time home buyers has proven to be a reliable and sound investment, and Congress should immediately extend and consider expanding it.
Thank you for your continued leadership and for your attention to this most important matter.
Personally, I’d rather have a flat tax than a tax credit for home purchases. Although I’m all for reducing tax payments when they are needlessly high, I find it interesting that Shea-Porter thinks this tax break is good while she opposes other tax breaks. This one is good, she believes, because it encourages people to do what she thinks they should do. But as Thomas Sowell points out, redirecting economic activity to some supposedly “good” purpose has all sorts of other effects that hit every one of us in unpredictable ways.
I wonder if Carol Shea-Porter would support tax credits for any of the following economically stimulative behaviors:
* New car purchases
* New yacht purchases
* Used motorcycle purchases
* Firearm purchases
* Movie ticket purchases
* Chocolate cupcake purchases
* Vacation cottage rentals
* Newspaper subscriptions
* Dining out
* Leaf peeping trips
* Spam purchases
Is it just the total dollar amount that makes it worthy of a tax credit? If so, why not give a credit for any purchase worth more than $100,000? What if you bought $200,000 worth of Spam?
Is it the fact that buying a home is, statistically speaking, a good investment and has rippling economic benefits? Well then why not a credit for buying stock?
Wouldn’t it be better to lower taxes across the board by the amount that would be lost to a tax credit and let people decide for themselves how to spend the money rather than have the government direct their spending decisions to behaviors the government prefers?
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Agree that a tax cut “across the board” giving people autonomy with their money is the better idea. But that’s not the Democrat’s way.
Still, anything to reduce tax revenue to the Fed is good.
Comment by Howard — October 15, 2009 @ 7:03 am
A tax credit for FIRST TIME stock purchases is a great idea - it will get people intested in investing.
Is this editorial a critique of Shea-Porter for not telling Pelosi what everyone already knows (that “buying a home is, statistically speaking, a good investment and has rippling economic benefits”) or of tax credits in general? You got me confused.
Comment by Jim, Manchester — October 26, 2009 @ 2:44 pm
Maybe it’s just the only method that she can suport the administration in propping up these “great” economic numbers. Where would the economy be if we took away government spending on things like cash for clunkers and the home buying tax credit. See if this makes sense to anyone….near 10% unemployment means we’re coming out of the recession. I wonder what our economic climate will look like when it’s discovered that the government spent the money to get us out of the recession not the private business sector. You know the old saying….you play with fire scarecrow
Comment by Lenny — November 3, 2009 @ 9:19 am