Libertas

Professor Woods continues with the  federal, state, and local governments’ programs to encourage people to buy homes, which created more artificial demand in the housing sector. Developers received “handouts, free land, new roads, and tax privileges to build homes…even if nobody want[ed] to buy them.”

The federal government takes around 35 percent of a workers income plus social security and Medicare taxes unless the worker invests in the stock market with an IRA, pays primiums to health insurance through the employer, or borrows to buy a house. Renters and people who buy a home outright do not get to write off their housing cost. The government gives strong incentives to buy instead of rent and to borrow heavily to buy.

First time borrowers get a $5,000 tax credit. An investor who buys a home and sells it pays no capital gains, but if the investor bought stocks or a business and then sold the investment would pay 15 percent capital gains (2008).

Woods does not want to repeal these tax breaks, but wishes instead to extend as many other tax breaks to other purchases as possible so as not to artificially stimulate one sector of the economy.

Inspired by Meltdown by Thomas E. Woods. Jr.

“If you’re not petrified, you’re not paying attention.”