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‘Gov. Devalue’ seeks higher home sales taxes

Scott has caught a very interesting — and disturbing — item in Gov. Deval Patrick’s proposed tax package: A plan to eliminate current home-sale exemptions and simply slap on a 6.25 percent sales tax on the gains on any sale of a house in Massachusetts.

We’re talking big bucks, folks, adding potentially thousands of extra dollars that sellers would owe after the sale of their home or condo.

As Scott notes, some have quietly nick-named Patrick “Gov. Devalue.”

Besides the added costs, this is a poorly timed idea, considering the housing market is only now beginning to recover in prices.

File under: Devalue

Read other posts about: Massachusetts real estate

10 Responses to “‘Gov. Devalue’ seeks higher home sales taxes” »»

  1. Comment by Rich | 02/18/13 at 9:13 am

    OMG, what is the Governor thinking?!?! It’s the government’s job to subsidize the real estate market with tax deductions, super cheap mortgage money, exemptions from capital gain taxes, and mortgage insurance. I won’t vote for any pol that tries to take any of this away: hands off my welfare Mr. Patrick!

  2. Comment by Suburban reader | 02/19/13 at 3:42 am

    Ah, c’mon. Is it really “welfare” to not have something taxed? Is it “welfare” when food and clothes are exempt from the state sales tax, as is the case today? Is the governor cracking down on “welfare” when he proposes that candy and sodas be taxed? Just because something isn’t taxed by government doesn’t mean it’s a form of “welfare.” It’s our money, not theirs to take at their whim. If anything, it’s government that acts as the “welfare” recipient, taking wealth from others. Leave the current home-sale exemption alone. This isn’t about “welfare.” It’s about government grabbing money from wherever it can get it.

  3. Comment by confused | 02/19/13 at 8:12 am

    How is the current used home purchasing system not welfare? Mortgage interest deductions is essentially tax-payer backed gifts to banks and realtors. People would own the same home with the same payment without the tax break, unless the laws of supply and demand have changed. The ultra-low interest rates and mortgage purchasing programs employed by the Fed are gifts overtly aimed at keeping prices up so more banks don’t fail. We’ll pay for it with continued inflation. Remember when gas was $2.50 a gallon?

    The home-sale exemption is welfare because one portion of the population benefits at the expense of other taxpayers. The same reason government cheese to the poor is welfare.

  4. Comment by Suburban reader | 02/20/13 at 3:25 am

    Again, there’s an assumption here that the government has a right to our money and that if they don’t tax us, or give us exemptions, it’s somehow a form of “welfare.” They’re not giving us anything. They’re taxing. They’re taking. They’re the recipients of others’ wealth, not the other way around. Where is it written in stone that state government somehow has a right to tax the gains on home sales? And when they don’t tax it, that’s somehow a form of “welfare”? We live in a warped universe in Massachusetts if people really think that not taxing something is a form of “welfare.”

  5. Comment by Boston condo buyer | 02/20/13 at 9:15 am

    Truce. Instead of Boston real estate tax lets have a “crash tax.”

    If you drive through Missouri City, Texas, please be extra careful.

    That’s because the town has decided to charge a “crash tax” to motorists involved in accidents. The bill can run as high as $2,000 per wreck.

    The “tax” is meant to pay for emergency responders, and only those drivers deemed responsible for collisions will be charged.

  6. Comment by Mike O | 02/20/13 at 11:05 am

    The larger problem here is the overall level of taxation. You can complain about the distribution of tax burden, but the bigger point is that we’re only talking about increases in taxation. It’s not like DP is proposing reducing some other tax in favor of this new tax, it’s just an addition to tax. And what are we, the citizens getting for our ever increasing tax burden? Some highlights of the 2014 budget compared to the 2001 budget, total change over 13 years:

    Education: up 3% (that’s in total, not per year, not even close to inflation)

    Environment and recreation down 33%

    Healthcare up 59% (state employee healthcare specifically up 54%) ***

    Human services (children, disabled, elderly) up 1% (way below inflation)

    Infrastructure, housing and economic development down 2%

    Law and public safety, down 1%

    Local aid down 44%

    Debt service up 22% **

    State Pensions up 17% **

    Libraries down 53%

    Total budget up 17%

    So, higher taxes and more government spending and we barely hold even on education and social services and lose major ground on everything else except ballooning state employee pensions/healthcare, overall healthcare (Medicaid), and debt/interest payments?

    That sucks. That’s the problem. Oh, and by the way, those two lines, healthcare and pensions? They’re just starting to grow, wait until you see them in 5 years’ time. They’ll probably be 40% or more of the total budget. So don’t worry Boston Condo Buyer, it won’t be an issue of “instead” let’s have a crash tax, it will be “in addition”.

    Good luck everyone, we’re going to need it.

  7. Comment by Mike O | 02/20/13 at 11:09 am

    For those interested, the source of the 2014 budget data.

    http://www.massbudget.org/report_window.php?loc=budget_monitor_governor_fy14.html

  8. Comment by plots in Satara | 02/21/13 at 12:05 am

    The main problem is the tax .the tax which we paid against property is very high.and this is the main Concern.

  9. Comment by confused | 02/21/13 at 3:40 am

    I disagree. Why should other income be taxed and not gains on the sale of property? It’s income. I’m not saying that I’m for taxes. I’m saying why should some get to keep money tax free and others not?

    Mike O, you nailed it. The only thing that makes pension liabilities manageable is if we inflate like Hades. As Greenspan said, we can guarantee there will be enough money to pay for social obligations, we just can’t guarantee that the money will have any purchasing power.

  10. Comment by Nemo | 02/21/13 at 4:08 am

    We no longer have the ability to inflate like crazy to make our social safety net and pension liabilities manageable. Most of these are inflation adjusted automatically. That’s why you see such huge increases in these categories while other categories that don’t have automatic inflation adjustment stay the same or decline.

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