We have high unemployment, very low new home construction and a large supply of unsold homes. Instead of penalizing those who can afford more than one home, are up to date on their mortgage and are paying real estate taxes; let’s give them an incentive to purchase additional homes. After all, they have the money. Let’s entice them to spend it.
Eliminate the restriction of deductions only for your primary home and one other property. Give deductions for any home owned.
For any home purchased that has yet to be built; allow doubling the mortgage interest paid and real estate tax paid as a deduction on the federal income tax return for 8 years. For any home purchased that has been built (but never lived in) or is in the process of being built; allow doubling the mortgage interest and real estate federal tax deduction for 5 years.
The federal government would not lose revenue since, currently, there is no revenue from these homes. In fact, they would still collect tax revenue, since this would not be a tax credit only a tax deduction. Local governments and school districts would see an increase in tax revenue and revenue from building permits.
Workers in the various building trades would be employed. They would then pay federal, state and local taxes on their income. If applicable, those collecting unemployment compensation or other public assistance would be taken off those rolls. Local merchants (building supply houses, furniture stores, appliance retailers, carpet and floor outlets) would see an increase in business. (Again, more related taxes collected.) Most importantly it will give those unemployed or suffering from the economic slowdown a needed boost in self-pride. There is no downside.
This same thought process, on a grander scale, can be applied to businesses that contract for new manufacturing facilities, here in the United States. It can also be used for allowing a business to purchase an unoccupied manufacturing facility with an immediate plan to rehab the facility, get it up and running. Accelerated depreciation could be allowed; increasing other associated deductions could also be applied.
For these programs to work we need to embrace those that have the means to make these things happen; not berate them. We need enact long term programs to eliminate the fear that this is not a short term fix but a change in attitude. If we don’t, it is unlikely that someone will make a long term financial commitment fearing the benefits would be eliminated in the future.
The current negative attitude toward those individuals and businesses that are successful might make for good political theater; but it is not going to get us one step closer to solving our economic problems. Give those that can create employment that have money to spend, encouragement to spend, and the credit they deserve for their success. Give them a long term plan they can feel comfortable with.
See excerpts from my book on Amazon:
Essays From a Fed-Up Middle Aged, Middle Class American" By: Andy Strum
http://www.amazon.com/Essays-Fed-Up-Middle-Class-American/dp/1453640460/ref=sr_1_1?s=books&ie=UTF8&qid=1316906896&sr=1-1
