RSSTax credit will rev up first-time home buys over bleak winter
Yakima Herald-Republic Editorial Board
This editorial appears in the Nov. 4, 2009, Yakima Herald-Republic.
A measure to continue the $8,000 tax credit for first-time homebuyers appears headed for passage in Congress, and that's good news for the Yakima Valley.
But its renewal doesn't mean the program has run smoothly. As with most efforts to kick-start the nation's sluggish economy, it has experienced a bumpy ride along the road to recovery.
Housing experts in Central Washington have pointed to the $8,000 tax credit as a reason why sales of existing homes in Yakima County during the second quarter of this year showed positive growth compared to depressed markets elsewhere in the state. In fact, Yakima County was only one of four counties in the state -- all from Eastern Washington -- where the median sales price of existing homes actually rose. Yakima's increase was 3.6 percent.
The Senate is expected this week to renew the tax-credit program for first-time homebuyers, which would have expired at the end of this month. Strengthened through bipartisan support, the measure also allows people who have lived in their current home for at least five years to become eligible for a new $6,500 tax credit if they buy a home. The five-year stipulation is designed to prevent speculators who have flipped homes from making a quick profit through the tax credits.
The program would run through April 30, and income levels for homebuyers to qualify would jump to $225,000 for couples and $125,000 for individuals.
Protecting this mini-stimulus program for the housing market is important given last week's dismal news on consumer spending, which fell in September for the first time in five months.
For the nation's economy to be lifted, consumer spending needs to be strong and the housing market needs to be resilient. With consumers failing to provide such a driving force, the housing market has to step in.
And that underscores the importance of the tax-credit program, which appears to be the most palatable for politicians to support. Dealing with foreclosures that have hammered other areas in the country has become more problematic.
That doesn't mean, though, the tax credits have been foolproof. Far from it. According to a recent report from the Treasury Department's inspector general, the Internal Revenue Service has so far uncovered 167 possible criminal schemes and has started more than 107,000 probes of likely civil violations.
Since the program began in February, only around 15 percent of the homebuyers who signed up for the credit actually needed the money to secure their new home.
Still, the tax-credit program has created an upward trend in the housing market, which is clearly evident in the Yakima Valley.
As we head into the cold winter months, anything that will heat up the sale of homes is welcome. We just hope the presence of fraud in the program cools down.
* Members of the Yakima Herald-Republic editorial board are Michael Shepard, Bob Crider, Spencer Hatton and Karen Troianello.
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This taxcredits are good for the first time home buyer. But this money from the tax credit has to be picked up somewhere else so our governemnt can spend excessively. I do not think all these tax credits are doing anyone any good in economical situations like we find ourselves today! Like the cash for clinkers program. It will come back to bite the people whu used it and it is costing the taxpayer over $24,000.00 per car. It is just another way that Obama is embezzling the taxpayer !
Report ViolationDatruef. You got it right! If you couldn't afford a decent car before the clunkers program, you couldn't afford a new car with the program. A whole bunch of people will be tied into payments and/or mortgages for a long time to collect the one time tax incentive.
Sounds like a lose/lose program to me.
These temporary "fixes" only distort the free market. It causes people who would already buy homes to buy them sooner, but when the program expires, it causes people to hold off buying homes until the govt. creates the next incentive. It would be better to just permanently lower taxes on purchasing a home so there is some stability in the market.
Report ViolationWell as on the cash for clunkers where the buyer is saddled with a 30% tax on the amount the government chips in. I would do some investigation on any tax credit. Under Obama I would not judge a single things by its cover. Now I read where Hilary Clinton told the Israeli government that the United States did not want any new settlements built. First Bill Clinton when president wanted the Israeli's to give the Palestinians the high ground ! DAH ! And Hilary writes a book, It takes a village to raise a child. Now she is contradicting the book saying the Israeli's cannot build a village because we want your children raised like islamic insurgents! Obama should try to rule America better before trying to screw up rest the world along with America !
Report ViolationDatruef,
But then Hillary would have nothing to do. She has to get our money some how.
Oops, I spelled Hellary wrong. Sorry.
Report ViolationI am so terribly sorry, I still can't spell. It is Hilary.
Report ViolationHuh- I think maybe you were the one spelling it correctly. I think Bill may agree with you !!
Report ViolationNow that we have the spell checker up and operating again...
Congress.. the House and the Senate are the root of our problem... they pass the laws .. the President signs them.
If something happens , it is because Congress wanted it to happen.
Our economy will soon collapse. The only thing holding it up now is because other countries are buying our securities as we indebt our childrent for centuries to come. Congress then hands the money around paying off political favors in the form of stimulus, housing credits, Cash for Clunkers, etc
This will end. Why should they invest in American when there are vast untapped regions such as Africa, South America that offer a better place to spend funds ?
We were told that General Motors made a profit... but it wasn't in the US, it was in China. General Motors has a partnership with a Chinese company(FAW) to market Asian made vehicles to major countries such as India, Russia, etc. around the world AND US. They also have a partnership with an Indian company (FAW) to do the same. Oh, yes, 61% is owned by the taxpayers. We are manufacturing cars in China and India, using their labor. Is there something wrong with this picture ?
Let me get this straight... our firefighters, teachers, and other workers send their pension money to Goldman Sachs who then turns around and finances new factories in China and India so they can sell the item they make with cheaper labor to the firefighters, teachers, and other workers.. Is there something wrong with this picture ?
And... they all want a raise ...
Because of Congress and it's policies, we have lost our worldwide competitiveness. We have little to offer.
The difference between whether an item is made here in the US is simple. It is COST.
If an item that sells in the US is made here competes with an item that is manufactured in another country plus the shipping costs to the US is cheaper, it will be sold here. If the item can be made abroad and it's price plus shipping is less than an item made in the US it will be sold here... (the thousands of items in Walmart, Costco, ShopKo, Target,.... the list goes on are evidence of this)
China has more workers than all of the other industrialized countries in the world. India also has a similar amount. The average wage is 1/10th the wages here. Who, in their right mind, can ever believe all the BS being fed to us that our economy is coming back ?
China has 67,000 closed factories. They are closed because there is no demand for their products.
Rivers and bays around the world are filled with container ships "warehouse" for lack of demand.
Our government's policies of loose credit allow us to buy the items and run up massive credit card bills that a recently bank disclosure stated had a default rate of 20%.
China us attempting to build demand going so far as to consider opening factories here in the US so the US workers can earn money to buy their goods. They are going to love the SEIU (labor union) when they do. So... why would they bother when they can go to another country where they don't have to deal with the problem.
When China got into the manufacturing business, they didn't just buy a plant in the US and run it. Instead, in many cases, they bought the plant, boxed it up, and moved it to China. They then manufactured the product with cheap labor, shipped it back to the US, and sold it here.
China bought a great many old factories such as the steel mills in the Ruhr Valley in Germany and moved them China.
Recent statements indicate China is building 2 coal fired plants a week and has a 50 year supply of coal.
Our Congress hamstrings our economy with legislation that limits carbon emissions, green energy, etc.
One of the things I find ironic is the thing about electric cars.. WHERE IS THE ELECTRIC ENERGY TO CHARGE THE CAR COMING FROM.. A WINDMILL ON THE TRUNK ?
While they say we will use all available forms of energy, the truth is they allow very little.
We have massive energy resources but can't utilize them.
Something is very wrong with our government.
Has anyoane noticed the financial heads of our government are all Federal Reserve and ex-Wall Street executives... Goldman Sachs being the most significant?
Take any of the names you read about... Bernanke, Summers, Rubin, Geitner, etc. and look up their bios. it is enough to scare you to know who they really are and what they stand for.
While you would think that CitiGroup would be a opponent of government policies, a recent article indicates they were hand in hand with Congress's policies regarding ACORN and the housing mess that led to the downfall of our economy.
http://tinyurl.com/yzabupl
This type of activity was allowed by the repeal of the Glass-Stegal act.. The Gramm-Leach-Bliley which was passed in the Senate 90-8 (one not voting) and in the House: 362-57 (15 not voting).
The saddest part of this whole mess is that we keep re-electing this same group. Are the voters of this nation out of their minds ??
I also believe the investors around the world are being scammed.
Every day Bloomberg (bloomberg.com) publishes the stock market count for exchanges around the world.
Every day, there are new articles on the front page.
I believe, after watching this page for an extended time, articles are posted to move the market up and down at will.
Stock brokers make money whether the market goes up or goes down. Either way, they win. Why not leak a little tidbit to Bloomberg to make a buck ?
Recently, an ex-employee of Goldman Sachs was charged with stealing code for a valuable software that allowed 'flash trading' (getting information on trades before they hit the trading floor)so Goldman Sachs could immediately react to the 'information" to make millions.
In a press conference, a Goldman Sachs representative stated that it was imperitive the thief be caught and the software secured because "a company using the software could control the market"... I am led to believe that if it were in Goldman Sach's hands, they wouldn't do the same. Of course they would.
Un employment is 10.2%. It will go much higher.
More businesses will close because of the lack of buyng power of workers.
Government tax receipts will fall with the result of civic benefits being lessened.
I do not believe anything the government representatives tell me any more.
I can only say... be ready... a big downfall is coming. This can't go on.
In post 17414 I made an error.
General Motors has partnered with REVA in India
General Motors partnered with FAW, a Chinese government vehicle manufacturer in China.
My mistake for making the partnership error..
Congress's mistake for bailing them out and stealing the company from the bondholders and then giving 22% to the Autoworkers Union as a political payoff.
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