Own A Home? You’re On Welfare.
Well, at least that’s what a columnist in Time magazine thinks. (It is in the current paper issue, so it’s not available online yet.) I never really thought about it that way, but he is kinda right – owning a home does provide the homeowner with a kind of welfare in several different ways. From the $8,000 tax credit that first-time homebuyers are receiving, to the 80% of mortgage loans owned (and subsidized by) Fannie Mae/Freddie Mac, to the income tax deductions for mortgage insurance paid, and to the deduction for property tax bills, homeowners do, in fact, benefit from a form of welfare directly from the government. All these credits and deductions add up to over a staggering $110 Billion dollars a year in government giveaways to people who own homes – which is 33% of what we spend on all entitlement programs combined (2006 numbers equal $354.3 billion and includes Medicaid, food stamps, family support assistance (AFDC), supplemental security income (SSI), child nutrition programs, refundable portions of earned income tax credits (EITC and HITC) and child tax credit, welfare contingency fund, child care entitlement to States, temporary assistance to needy families, foster care and adoption assistance, State children’s health insurance and veterans pensions.) Most of these tax benefits go to people in the upper end of the income spectrum, according to the article, and they also push us a people to buy houses we cannot afford, as we think that we’ll get some of it back on our taxes. I will never forget an old boss of mine telling me to look at houses WAY out of my price range, because “you can deduct the interest payments” each year. Yea, well, hey boss – I still have to make those 12 monthly payments to the mortgage company before I can get that interest back!
