President’s New Jobs Bill WILL Negatively Affect the Housing Market and Charities

Check out the spin on this headline:

“White House outlines $467 billion in savings to pay for jobs act.”

Where do you think the savings are coming from?

The more government proposes　to help the overall job market the worse the overall economy and jobs market will get. The latest target of the government for money will be homeowners and charities.

Home ownership and how this bill can affect it.

First, one of the reasons one gets a　mortgage when buying a home is to　use the tax deduction. All parties win. Home buyers win for　now they can use money not spent by putting more money into the down payment, invest or spend as they see fit. More money back into the economy increases consumption. With interest rates at historic lows, 4.5% and lower in some cases, it’s perfect to take that additional capital and invest it. In my case it made it possible to buy an investment home. This is a great way to take capital ($50-$100K or more) and earn 12-15% on your money. The rental market is incredibly strong due to thousands of people losing their homes to　foreclosure or through a short sale (which shows up on one’s credit report as a debt resolved as opposed to walking away from the problem). People who　are in either of these situations can't buy a home for 3-7 years and they need a home or condo to live in. This is an effective way to use your money and invest conservatively for strong growth long term growth. Homes will eventually appreciate and the rental mortgage is being paid by the tenant. I have tenants who have been in my rental homes for 8-10 years.

Second, and more concerning, the bill will eliminate the tax deduction for charitable giving. The charitable tax deduction has been effective for us to give to the charities that best fit our values.　The　problem we have is that the size of our government spending is so great and many more people aren't paying taxes. (Yes, that includes the poor, unemployed, underemployed and　smart　companies whose lobbyists rewrite the tax code for their benefit).

The government is like a drug addict looking for their drug money. This "jobs bills" will do just the opposite. Charities and churches that rely on our donations to assist those in need will have to do with significantly less in a time when they　have more people in need.

In my opinion, the new jobs bill that the President is trying to sell us is now trying to redistribute our wealth at the expense of home ownership and charitable　donations. To me it negatively effects the very institutions that we cherish.

Your opinion is welcomed.

Paul Mruk