Interesting opinion piece in the Wall Street Journal. Here are some highlights:
The Treasury’s inpector general for tax administration, J.Russell George recently told Congress:
74,000 filers hadn’t purchased a home but claimed the homebuyer tax credit for a total of $500 million.
500 people under the age of 18, including a 4yr old claimed the homebuyer credit.
The point in the story when does a taxpayer’s sense of humor give way to a different emotion. The homebuyer credit cost is running at about $1 billion a month and $15 billion for the year. It’s another distortion that drives capital into housing and away from other more productive uses. For millions of tax-paying renters, it’s another subsidy they provide for their neighbors to be able to sell their houses at a higher price.
Leave it to congress to design a program that even a four-year-old can scam.
In another WSJ article:
Uncle Sam’s interventions in the housing market have pushed home prices 5% higher on a national average than they would have been otherwise, Goldman Sachs estimates in a report. Read more