3rd-Graders’ Plot To Attack Teacher Foiled, Ga. Cops Say Kids Planned To Bind Teacher With Handcuffs And Stab Her With Steak Knife

Unfortunately these kids will be allowed back in school at some point because education is a right. (sarcasm intended)

Republicans are feeling the heat from Democrats on the Hill and their constituents back home. Caving in to the pressure Senator Isackson (R - GA) is proposing a one time tax credit for new home buyers and homes in foreclosure.

Senator Isakson has introduced legislation (S. 2566) that would provide buyers of either a newly constructed house or one that is in foreclosure or default with a one-time, $15,000 refundable tax credit. The bill would apply to purchases made between February 28, 2008, and March 1, 2009. To qualify, newly constructed houses would have to have been built on or before September 30, 2007. Owner-occupied structures in default or foreclosure must have been in default prior to March 1, 2008, even though the actual sale would take place after that date, although there is no such restriction on foreclosed structures owned by a mortgage company or its agent.

Why is this a bad idea?

The proposal suffers from the following weaknesses:

* As a general principle, an explicit federal subsidy for the purchase of certain homes is both bad tax policy and bad housing policy.

* This subsidy rewards those who have been the most irresponsible. It would benefit homeowners at any income level who either irresponsibly borrowed all of their home equity or took out a loan that they could not repay but hoped to profit from by reselling the property in a rising market. However, those who have made the effort to pay their mortgages on time would not be assisted at all, regardless of their financial circumstances.

* Homebuilders who ignored signs that the market was slowing and built houses in hopes of finding a buyer would get assistance in selling houses that should not have been built in the first place.

* Responsible homeowners who must move for a new job or for family reasons would suffer because the sale of their homes would not qualify for a tax credit, while those of their less responsible neighbors would qualify for one. The potential plight of responsible homeowners could be cited as a reason to expand this credit to all home sales, thus increasing the cost to all taxpayers.

* Since the credit is refunded only after the end of the next taxable year, the money would not be available at the time of purchase. In practice, this limits its effect to those buyers who have the money to make a purchase up front; i.e., upper-income homebuyers.

* By applying the credit only to homeowners in default before March 1, 2008, the bill leaves out those homeowners whose mortgage interest rate will reset after that date. This provision may be intended to reduce incentives for default, but it is so poorly written that it essentially rewards those who were irresponsible early while excluding those who were victims of circumstance after that date.

The natural urge is do something, doesn’t matter what that something is just do something so the people back home think you are doing something. That was a lot of somethings. My point is that Republicans need to stand on their conservative principles and not pass a bill just to pass a bill. If they are going to give a tax credit they need to give it across the board and not restrict it as Senator Isakson has done.