Tax Incentives

tax breaks for home ownership / are incentives to own homes / i can't afford a house. how irrational

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4 comments to Tax Incentives

  • This cartoon goes much deeper in its implications. Tax breaks for home ownership are a form of subsidy. Subsidies have the effect of artificially increasing demand which results in an increase in the price of the product. The unintended consequence of tax breaks subsidies is that it artificially inflates the value of houses thereby making housing less affordable.

    As an example, look at the foreclosure “crises”. The government is attempting to “protect” home prices. So we have a case were certain people overpaid for a house, but the price of the house is not allowed to fall to a market value were people would actually be able to afford to buy it.

  • Steve is so, so right!! As always, “the rich get richer” and the rest is the history of class struggle. Isn’t it fine to have a bright mind like Nina’s at the drawing board and on the web.

  • OMG, this hits home. But I agree with Michelle and Steve.

  • Reading the comments of Michelle and Karl made me realize that there is another implication that I overlooked.

    The government needs $XXXX.XX dollars to operate. The money to operate the economy comes from taxes. Now, assume that the government operates in a fiscally sane manner (cough) with a balanced budget. Since the government needs to collect $XXXX.XX dollars to operate, the use of tax breaks means that tax revenue will decline so other taxes will have to be raised to cover the cost of operating the government. Translation, tax breaks are a phony incentive.

    So one cam logically conclude that those who don’t own homes are subsidizing home ownership. Even If you are a home owner and get to deduct some of your property taxes you end up paying other taxes which would be higher than they would otherwise be.

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