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Wednesday, April 02, 2008
Tax Title of the Senate Housing Stimulus Bill
Help me out with this one...
This is pretty peculiar. The Senate Finance Committee announced today a set of tax relief provisions "for homeowners, homebuyers, and homebuilders," to accompany the Senate housing stimulus package. A vote on the title and the bill could come as early as tomorrow.
The provisions are described, with estimated costs, here, and summarized below:
- A standard property tax deduction of $500 for single filers and $1,000 for joint filers who do not itemize property taxes. Present law allows only those who itemize deductions on their federal tax returns to deduct state and local property taxes (How many of the benficiaries would have bought anyway, even without that juicy $500/1,000 incentive?)
- Bonds for refinancing of subprime loans, mortgages for first-time homebuyers and multi-family rental housing. The measure also exempts interest earned on the bonds from the ATM. (Multi-family rental units in foreclosure trouble?)
- Extension of net operating loss carry-back to four years, from the two years currently allowed for businesses. It contains measures to prevent companies from abusing the intent of the provision (Relevance to "homeowners, homebuyers, and homebuilders"? No comment. NB: it's 60 percent of the total tax cuts here.)
- A tax credit for the purchase of homes in foreclosure, for as much as $7,000 to be claimed over two years (Relevance to the foreclosure crisis? No comment.)
The total cost of the tax provisions comes to $10.8 billion over 10 years. No revenue-raising offsets were included in the Committee's announcement materials.
Whatever. OK, some questions:
--> How much of the $10.8 billion in tax relief is specifically targeted at those in danger of or already in foreclosure? (A: 20 percent, at best; the other 80+ is deficit-financed untargeted tax cuts)
--> Do you just need to have the word "stimulus" in the bill to exempt it from PAYGO compliance? (A: Looks like)
Posted by Dana Chasin
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