In all this debate, I fear both parties have missed a critical point.
Both versions of this bill impose a permanent new tax on every mortgage backed by Fannie Mae and Freddie Mac.
To pay for an additional two months of tax relief under the Senate version or 12 months under the House version, more than $3,000 of new taxes will be imposed on every $150,000 mortgage backed by Fannie or Freddie.
A family taking out a $250,000 mortgage will pay $5,000 more in taxes – directly and solely because of this bill – hidden in their future mortgage payments.
This is atrocious public policy. It shifts the burden for this bill to future homebuyers, kicks the housing market when it’s already down, makes it that much more expensive for home buyers to re-enter that market, and adds to the pressures that have chronically depressed everyone’s home values.
That’s the reason that both the Senate and the House versions need to go back for major revision.
House Chamber remarks by Congressman Tom McClintock, Washington, D.C. December 20, 2011.