Mike McDaniel

Bush signs new housing bill into law in exchange for higher taxes and taxpayer liberties.

The Housing Assistance Tax Act of 2008 is the latest action taken by our elected officials to relieve us of our liberties and our wealth.  Did you notice the word "tax" in the Housing Assistance TAX act of 2008? What is the word Tax doing in the title of a housing assistance bill? Well, our "leaders" (term used very loosely) have used the crashing of the mortgage/real estate markets as an opportunity to increase our taxes, steal more of our liberties, and redistribute our wealth to the needier among us. 

The Bill includes several tax increases. Check with your CPA.  The most notable tax increase is the abolishment of the personal residence exclusion on vacation homes or rental property.  Under current law an investor could move into a previously rented home for 2 years and claim an exemption on the capital gains when the once rental property was sold; no more (see the last paragraph of THIS SUMMARY).  This change alone is estimated to generate approx $1.4 BILLION in taxes over the next 10 years.

Our liberties continue to be compromised by our "leaders" as well. It is now law that all credit card purchases be reported to the IRS. You see, the IRS can judge your tax liability in two ways; how much you earn or how much you spend.   Now they will know how much you spend, where you spend it, and on what you spend it on.  This alone is expected to generate approx $9 BILLION in taxes in the next 10 years.

The most disheartening portion of the bill may be the increases to the federal affordable housing objective.  The bill designs yet more bureaucracy in the hope for government sponsored affordable housing (never mind the Trillions wasted on this goal already). 

According to the AP –  White House spokesman Tony Fratto said that the Federal Housing Administration would begin right away to implement new policies "intended to keep more deserving American families in their homes."  My question is, who sits on the committee to determine the "more deserving American families."

Come on, sing it with me…
Socialism here we are, do da, do da. 
Government decides who is worthy of our philanthropy ‘oh do da day.

[editor’s note: Mike McDaniel is the Executive Director of Sierra Environmental Studies Foundation and the principal of McDaniel Wealth Management.]