Hillbilly wisdom: every law favors someone and M. Greenes’ proposed HR4327 is no exception. Profit on home sales under the Clinton administration was untaxed subject to limits if the home owner held the property an extended time. At the time this IRS rule changed drove the housing market. Prices on houses increased as homeowners traded up. Now under Greene’s proposed changes, all profit would be untaxed. This would help housing supply? An example of the effect of proposed changes, a couple purchased a home for 400,000 held it the required time and sold for 1.2 million. Taking the current exemption 500,000 for a couple, the couple would pay taxes of 60,000. This is a tax rate on their profit under 10%. This is unfair according to Shannon McGahn, vice president National Association of Realtors. “A homeowner should not be taxed like an investor”. McGahn is a professional salesperson whose livelihood is derived from commissions on sales of property. (*Totally unbiased opinion). (BullSh*t).

While an argument can be made against taxation, the homeowner knew the rules when they purchased their HOME. It is a home until they decide to sell. At the point of sale the home is a house sold for a profit, subject to long term capital gains. The homeowners’ choice is to sell an investment. No one forces the homeowner to sell but HR4327 is an added enticement. There would be percentage of homeowners who would take advantage.

This proposed change would favor those who own large properties (investments with returns over the 500,000 exception). HR4327 would, once again, inflate the prices of houses as turning houses to take advantage of no capital gains would drive demand. Multiple sales would need to be made before the lower income buyers or first time owners would benefit from people trading up if they could even qualify for a loan. Of course, each sale would benefit the Realtor.

It appears that the proposed rule benefits the wealthy directly? A 500,000 dollar exception is not enough. It is an “outdated concept and needs to be updated”? In our example a 1.2 million dollar HOME is not good enough. How many working class people can afford a house that cost that much? Go back to the drawing board and refocus your efforts to help those who need it. The poor homeowner of the house with a selling price of a million plus should not be the main concern. Housing is a concern of politicians with midterms approaching. They don’t call it homing, housing is another way to benefit the wealthy.