Innovative ways to stimulate the economy: A transferable homebuyer's credit
Filed under: Economy
This is just one of the Innovative Ways to Stimulate the Economy suggested by DailyFinance contributors. See them all.
Under the most recent economic stimulus package, first-time homebuyers are eligible for a nonrepayable $8,000 tax credit if they buy a home. The rationale behind the credit is a growing consensus that a rebound in housing will be crucial to any economic recovery.
CNBC anchor Dylan Ratigan had a great suggestion for a housing tax credit: Provide every active member of the U.S. military with a $50,000 transferable homebuyer tax credit. If they don't want to buy a home, they can sell the credit to someone who does and keep the cash. The idea behind this plan is that the effort to prop up the housing market would benefit people in the armed forces -- not people who lied on mortgage applications and bought homes they couldn't afford.
Conferring such a huge benefit only on people who happen to be in the military seems a little unfair, but Ratigan is on to something. The homebuyer tax credit should be made transferable, allowing people who might not be in the best position to buy a home right now to get some cash to help stimulate the economy, while also giving prospective homebuyers and investors an incentive to dive into the housing market.
Otherwise we run the risk of doling out tax credits that won't be used or, even worse, providing people who really shouldn't buy a home with an immediate incentive to do so, putting their families at risk of financial insecurity and foreclosure. And if that happens, the effort to dig out of housing crisis number one could very easily lead to housing crisis number two -- second verse same as the first.
Do you think this would stimulate the economy? Tells us why, or share your stimulus ideas. And see more of our Innovative Ways to Stimulate the Economy.
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Reader Comments (Page 1 of 1)
4-24-2009 @ 8:38AM
Donald B Parsons said...
We owe these brave soldiers so much more than this but this is definetely a good start. If not for their protection and dedication we could be speaking a different language today. We should be paying 100% medical / dental for life, give them a house , free education after service, etc...
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4-28-2009 @ 8:58PM
Julia said...
Members of the military already receive a housing allowance as part of their benefits. As well as dependents allowance, clothing allowance, free healthcare (including dental and vision) for their entire family - and the healthcare benefits last for life for the service member and their spouse.
You want to make a dent in the economy, extend the healthcare benefits the military receives (and the old - MediCare, the poor - MedicAid, the young - SCHIPs, etc.) to those of us in the middle class who pay for everyone else's benefits!
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5-02-2009 @ 10:09PM
realityjones said...
we give these soldiers to many costly benefits as it is why spend so much on "patriots" who have wasted their time and taxpayers money fighting on unfriendly soil
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5-07-2009 @ 12:15PM
Inkling said...
JULIA-Members of the military DO NOT get FREE health care, dental, or vision for their family. The service member PAYS for the benefits every month from their pay. The health care they receive DOES NOT last for life-only as long as they are a member. The Basic Housing Allowance they receive does NOT cover all of their needs and only benefits them if they are in the same area as their family. If they get orders to go elsewhere and their family doesn't go with them they have to pay for one place or the other out of pocket. The BAH in many place only covers the rent. It doesn't cover utilities. In some places the BAH doesn't even cover the rent. Military members SHOULD get a housing break, an interest break, and they should be allowed to transfer their mortgage if they get transferred. They should also get financial support to home school their children if the parents decide to do so. Their children are constantly being displaced and many schools are not supportive enough of students who transfer mid term. Many schools don't provide a good education and the military children end up doing work far below their intellect and grade level. They have to dummy down until they can get into the next school year and start a new home school curriculum, (hopefully, one is provided in their new city).
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5-07-2009 @ 12:14PM
Inkling said...
Reality Jones-Maybe YOU should do something to "earn" your freedom to sit behind your keyboard and type nonsense all day. Freedom has a price, have you paid for yours?
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