Today, for the first time in ten years, the U.S. House of Representatives has voted to repeal the federal estate tax. The final vote on HR 1105 was 240-179, with 233 Republicans and 7 Democrats voting yea. The bill was...
- The Tax Policy Blog
- Question for National Association of Realtors: Should Hom...
Question for National Association of Realtors: Should Homebuyer Credit Ever Be Eliminated?
The issue of whether or not to extend the homebuyer credit is before Congress. The housing lobby of course is out in full force saying that the U.S. economy needs this help. For example, here's what one paid shill from the National Association of Realtors said:
"The housing market would not have moved without this tax credit," said Lucien Salvant, spokesman for the National Association of Realtors. "It's a fragile recovery, which is why we think it should be extended."
When the economy is recovered, is the NAR going to support its elimination? Not a chance. There's a better chance of Glenn Beck being appointed to Obama's cabinet than NAR ever advocating for eliminating a tax preference for housing.
Assuming the homebuyer credit is extended to June 30, 2010, come May next year the NAR and NAHB lobbyists will be on Capitol Hill again saying that the economy still hasn't recovered. And then when it's extended for another year and the economy is fully recovered, they'll be saying things like "we can't afford to go back to where we were 18 months ago with lower home prices." By then, it will be permanent, and any time discussion of repealing it or scaling it down is brought to the forefront, NAR will cite how home prices are going to fall if it's repealed. You get what Milton Friedman called a tyranny of the status quo, or an endowment effect of a tax provision.
By the way, here's what the NAR had to say back in 2007...according to this ad, you'd never think our economy would "need" a credit for homebuying.
A year later, here's what they were saying:
Subscribe to the Tax Foundation Newsletter
We will never sell or share your information with third parties.
Join the Tax Foundation's fight for sound tax policy Go
About the Tax Policy Blog
The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.