CBS: Obama’s Two-Month Payroll Tax Holiday Paid for With Huge New Tax on Mortgages
Remember in December when Obama said we needed to extend the payroll tax holiday for a couple months? Well now we’re seeing the fine print on that gimmick, and it’s not good, via CBS:
More hope and change, I guess. I’m compelled to make a few observations. First, how will an enormous new tax on mortgages help the moribund housing market? This new tax will be paid for by borrowers. The Obama Administration’s assurances aside, it’s difficult to see how raising the costs of borrowing will stimulate more borrowing. I’m glad I’m not planning on buying a new house in the near future. If I was, though, I’d have to factor the additional costs mandated by this latest money grab into my decision. Second, there’s no way the simulative effect of a couple months of slightly lower social security taxes will offset the dampening effect of higher mortgage fees. In Ms. Anderson’s case (see video above), her short term gain of few extra dollars in her paycheck for two months will cost her $9,500.
Anderson will save a couple hundred dollars from having her payroll tax cut extended but her mortgage broker told her the new fee would cost her almost $9,500.
What a deal! I won’t even get into the fact that a temporary payroll tax holiday does nothing to stimulate productive activity in the economy, even without the new tax. Third, I have to admit I’m a bit surprised CBS ran this piece. It’s not exactly flattering to Obama. Fourth, I remember Allen West speaking in opposition to the temporary payroll holiday legislation. I also remember that Democrats and even some Establishment Republicans jumped all over him for his opposition. Turns out he had a point, no?