Steve Pearlstein of the Washington Post had a rather amusing yet at the same time somewhat scary look at the current debacle that is taking place in the U.S. Senate with regards to housing and the taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. code. It’s scary because what he says is true, and it says a lot for the state of tax policy in America.
Hold on to your wallets, Mr. and Mrs. America, Max and Chuck are at it again.
Yes, our favorite sugar beet socialist and cornhusk communitarian have decided to ride to the rescue of the nation’s troubled housing sector.
It all started on Monday when members of the Senate returned to Washington after another two-week recess in which they apparently discovered that voters actually expected them to do something about the housing crisis rather than just talking about it until the next recess. So Max Baucus (D-Mont.) and Charles E. Grassley (R-Iowa), the chairman and ranking member, respectively, of the Senate Finance Committee, took the opportunity to dust off a quartet of stinky tax breaks that had been rejected by the House and the Bush administration back in February, when Congress was scrambling to show that it was doing something about the gathering recessionA recession is a significant and sustained decline in the economy. Typically, a recession lasts longer than six months, but recovery from a recession can take a few years. .
According to congressional tax experts, these tax breaks would cost the Treasury about $28 billion in lost revenue over the next three years, which is a chunk of change, even by federal budget standards. And while some of that might be recouped in the form of higher tax payments in the future, you know tax lobbyists are already burning the midnight oil to make sure such a thing never happens.
He concludes with the following interesting piece of information regarding the role of one specific lobby throughout this whole ordeal, the home builders:
All this will do little to solve the housing crisis, but it may help to alleviate the campaign funding crisis created when these same tax provisions were jettisoned from the economic stimulus bill. The angry and ham-handed response from Brian Catalde, the president of the National Association of Home Builders, was to very publicly announce the indefinite cutoff of all contributions to federal candidates. Were those same provisions to be enacted now, it would be a stunning acknowledgement by members of Congress of the direct connection between political money and legislative outcomes.
The always informative Roth CPA Tax Update Blog has been following this issue pretty closely as well.
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