Tax Break Contributed to Bubble
Don’t blame it all on Bush, or on deregulation-crazed Republicans. An article in the NY Times today suggests that the housing bubble, and its subsequent bursting, may have been aided by a Clinton cut on capital gains tax. One real estate broker made $700,000 in three years, “and thanks to a tax break proposed by…
Don’t blame it all on Bush, or on deregulation-crazed Republicans. An article in the NY Times today suggests that the housing bubble, and its subsequent bursting, may have been aided by a Clinton cut on capital gains tax. One real estate broker made $700,000 in three years, “and thanks to a tax break proposed by President Bill Clinton and approved by Congress in 1997, he did not have to pay tax on most of that profit. It was a break that had not been available to generations of Americans before him.” Such situations enticed more and more folks into real estate, making homes “tax-free windfalls” and increasing sales by 17 percent. The tax breaks caused a zeitgeist shift, whereby a home became less an abode than an investment. They admit, though, that a tax break alone is not responsible for the mess. Other reasons include “a relaxation of lending standards, a failure by regulators to intervene, a sharp decline in interest rates and a collective belief that house prices could never fall.” And it turns out the tax cut came from the Clinton administration, but was in the mind of the Dole camp; they rolled out the idea first, making Clinton nervous; he pledged to cut capital gains to catch up.
Tax Break May Have Helped Cause Housing Bubble [NY Times]
Photo by Paul Graham Raven.
I thought poley said he thought he wanted to die young so he could leave a good looking corpse. (I didn’t know they could do that much plastic surgery on one person).
Although by the time Poley is old and grey, I will have passed on to that big, 25′ wide, period detail laden brownstone in the sky, but I plan to look him up. It will be interesting to see if his tune changes when it’s his arthritic foot in those orthopedic shoes.
Thanks bxgirl, excellent idea substituting one Chuck for another. I might hit you up for other casting suggestions.
I think that the million dollar properties that are continuing to sell are being bought by last year’s bonuses. People want to sink their dough into a house, better than keeping it in a bank, and if worse comes to worse and you have to serve some time for shenanigans at your bank or brokerage, at least the wife and kids have a brownstone to live in and rent out part of.
Once the bonuses from years past dry up, Look out below!!!!
snarkslope- may I suggest Chuck Norris? He still alive ( in a certain sense) so it would be cheaper than a re-animation. Admittedly he’s not as iconic but you would save on movie production costs since you won’t be laying out bucks for the special refrigerator, and the adrenaline drip.
In my movie treatment of Brownstoner, I am casting the reanimated corpse of Charles Bronson as Polemicist.
would love to talk to you someday about Japanese management benson. I’ve spent most of my professional career investing in japanese stocks!!!
Sam;
Agreed that NYS is not far behind in terms of a fiscal train wreck coming. I’m not much up on Califonia politics, so I don’t know what’s driving the situation there. As for NYS, there could be some possible good coming from the coming crisis. In my mind, Albany is a poster child for entrenched interest politics. I’ve mentioned it here before: New York State’s Medicaid expenditures is more than California’s and Texas’, COMBINED. The hospital system in NYS serves a sort of “outsourced welfare” function. Nominally, the hospitals are private, but much of their revenue comes from Medicaid reimbursements. The state builds up this sector to boost employment. This is New York State’s own “housing bubble” which is set to collapse. It will not be a fun thing to watch.
Polemecist: WOW!!! I think you need to relax. This country has been through alot of things: a civil war, WWI, WWII, a Great Depression, etc. and has manged to pull through and come back stronger than ever. One of the oft-overlooked strengths of this country is the ability of its systems and people to dynamically adapt. I work for a Japanese company and from this experience I have learned to appreciate this great characteristic of the US. The Japanese leadership is so rigid in its thinking and ability to adapt to changing times. Ditto for Europe. I used to manage our Milan office, and the rigidity of Europe’s business and political culture is also a sight to behold. It is no accident that these places HAVE produced these fanatical mass movements, as their system’s rigidity doesn’t provide for adaptation.
polemecist on some real black helicopter, tin hat $hit today. while that outcome doesn’t have a 0% proability, you are making a much bigger deal of the CA stuff than it really is. the state has done that before, and little inland empire municipalities bankrupting on 900K debts is hardly mass chaos in the streets. many of them will simply dissolve the towns into the counties. it will be hard for a while, but anarchy!? that didn’t even happen in the depression and it was WAY worse than where we are now. get back to me when someone you know is picking produce in CA and getting from job to job by hopping freight trains… i will get my model a fired up.