Was Housing Bill Good Tax Policy? Of Course Not.

August 6, 2008

When it comes to the tax provisions of the recently enacted housing bill that Pres. Bush signed, there was virtual unanimity among policy organizations in Washington, on both the left and the right, that they were pretty bad. Then again, this is Washington where special interests try to spread half-truths on policies merely to suit themselves. Kim Rueben at the Tax Policy Center blog provides a nice answer to the question: Was the housing bill good tax policy? Her closing paragraph sums up pretty nicely the view of most public finance economists regarding the role of tax preferences in the housing market:

At least the current credit is an improvement over an earlier tax break proposed for people buying foreclosed property. Still, adding yet another credit to the hundreds of billions in tax breaks we already lavish on homeowners makes me wonder whether we should step back and rethink whether owning is truly the answer for everyone.

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