The $8,000 federal tax credit for first-time homebuyers has been “immensely popular,” says Luke Mullins in U.S. News & World Report. In fact, it “may have become too popular”—according to a Treasury Department inspector general, 90,000 “sketchy” claims have been filed for the tax perk, including “one extreme case” where the “buyer” was a 4-year-old. That’s “wonderful ammunition” for people who want to prevent an extension of the credit.
The 4-year-old is only the youngest of 500 or so listed buyers under 18, says Patricia Murray in Politics Daily, which means that some adults are trying to skirt the income ceiling or first-time buyer requirement. But then again, “there is currently no law limiting the age of tax credit recipients.” So the real lesson here is that if Congress wants to extend the credit—and it does—it needs to tighten the rules and beef up the IRS’s fraud prevention.
Forget the fraud, says the San Francisco Chronicle in an editorial. Fiscal sanity is reason enough to scrap this “boondoggle” for the already heavily “subsidy-doused” home-builder industry. It risks re-inflating the housing bubble, and extending the tax credit—or even expanding it, as some lawmakers suggest—could turn a short-term “recession fighter” to a “flat-out entitlement.”
“I’m no economist,” says Malcolm Berko in the Chicago Sun-Times, but there should be “some room to negotiate” between the “negative Nellies” who want to scrap the tax credit and the lawmakers and Realtors who want to keep it going past Nov. 30. Both sides have good arguments. But in the end, “the housing industry is the heartbeat of our economy. So if it’s time for the defibrillator paddles, how can you say no?”