tax credit

That's a lot of money even in Washington.  At 10:30 a.m. tomorrow, the House Ways and Means Oversight Subcommittee will hear from IRS, Treasury, and GAO witnesses.  It will be webcast live here. 

I formulated the first first-time homebuyer credit back in 1975 when I was a revenue estimator on the Joint Committee on Taxation.  I didn't like the idea then, and I don't like it now.  The credit rewards those who would have bought a home anyway, most of whom have higher income than the taxpayers who are paying for it.  The taxpayers are mostly renters and get no tax breaks at all.  The only justification I can see for the homebuyer credit is that it may accelerate home purchase from next year to this year.  The overall number of homes purchased this year and next won't change much.  Check out this Urban-Brookings Tax Policy Center analysis, which makes these arguments in more detail.  This Congressional Research Service analysis shows how small the economic effect of the homebuyer credit is likely to be (See pages 7 and 8 for the results.).