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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: bentway who wrote (35226)7/13/2005 9:36:05 AM
From: TradeliteRead Replies (3) of 306849
 
Most housing initiatives, such as tax breaks, passed by Congress since the 1940s tend to be bi-partisan in terms of support, I think. No one wants to be against housing when the national policy has long been to encourage ownership.

Also, it's hard to fathom why the capital gains break on home appreciation annoys some people so much. It became obvious that the rules on this needed to change as home prices kept rising.

Selling the house is one way that many older Americans finance their long-term health care and nursing home expenses and stay off the welfare rolls in old age. There's not much point in taxing them to death because their home went up in value during their lifetimes. In many areas of the country, they've already been taxed to death at the local level via rising property taxes. And I doubt many of us want entire generations of older Americans to become welfare cases at our expense.

If real estate gets even more expensive, it wouldn't be surprising to see even further tax breaks on appreciation.

It takes great leap of logic to describe real estate appreciation in a primary residence as "unearned income subject to tax" in the same way stock gains are called "unearned income." When a person invests actively in a market, one expects to make money and pay Uncle Sam. When one buys a home, what happens to the value is beyond one's control. Too many older Americans who vote have been sitting on high home equity to allow their elected representatives to take a big chunk of it away when it's time to sell.
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