Politics and Money

[n4807g]

There's plenty of blame to be shared by both parties. My own personal belief; the housing mania was dramatically accelerated when the capital gains tax treatment on primary home sales was changed. When people complain about special treatment for a minority of taxpayers this is the "mother lode"!

http://www.nytimes.com/1996/08/30/us/clinton-proposes-tax-cuts-on-profits-in-home-sales.html

What a windfall for the few homeowners early in the real estate bubble.

Mr. Clinton's proposal would apply to all homeowners, regardless of their age or income, and as often as they sell a primary residence. The only prohibition is a two-year waiting period between home sales.

Robert Clair, a manager in the economic consulting services unit of KPMG Peat Marwick, said he thought Mr. Clinton's proposal would be good for the economy because it would allow homeowners to take their profit out of their houses and invest it elsewhere, like the stock market.

You can't make this stuff up...really.