Friday, November 20, 2009
Should Government Policies Favor Owners Over Renters?
The author of this article argues that the tax credit given to those who purchase new homes is very inefficient. He says that those that who will receive the tax credit would have bought a house without it anyways. In addition, the sales spurred by the credit, will shift renters into owners, which does not absorb the excess supply of houses. He also notes that besides the inefficiencies, 70 percent of all the dollar benefits, "accrue to households with adjusted gross income greater than $100,000. The tax credit may unintentionally be weakening the rental market.
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This was a very interesting article to read because of the different perspective pertaining to government policies and owning homes. The author raises valid points about the tax credits given to home owners but I still believe that the home owner tax credit is useful and beneficial. The tax credit is helpful for a lot of people who do not make over $100,000 and does encourage them to buy a home rather than renting. I think the tax credit is helpful to recent college graduates who are not making a lot of money but are sick of living in buildings like dorms. With how much money our country spends on other programs getting rid of home owner programs will not do much.
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