Tuesday, February 7, 2012

Crying Over The "Hidden Tax" In The Payroll Taxcut Extension? Shoulda Listened To Stoopid Conservatives When You Had The Chance

Here's an unintentionally funny story from CBS about new home buyers who are "surprised" to discover that the payroll tax cut extension passed with so much fanfare late last year includes a "hidden tax"

Just before Christmas, American workers got a rare gift from Washington politicians - the current payroll tax cut would be extended for two more months.

At the time, both President Barack Obama and House Speaker John Boehner lauded the move to avoid a tax increase for millions of working Americans. 
But there's something the politicians weren't bragging about - the fact that they're paying for the two-month tax cut with what has turned into a brand new fee on home buyers. 
The new fee is a minimum of one-tenth of 1 percent on Fannie Mae- and Freddie Mac-backed loans, and is likely to go much higher. 
It will be imposed for the next 10 years on most mortgages and refinancings and it lasts for the life of the loan. 
For every $200,000, it amounts to an extra $15 dollars a month. 
It's bad news for Patty Anderson, who's buying a home in Virginia. 
Anderson will save a couple hundred dollars from having her payroll tax cut extended but her mortgage broker told her the new fee would cost her almost $9,500. 
"I was absolutely startled that it would add up to that much," she said

It's only a surprise if you (1) don't pay attention or (2) rely on the regular media for your news. Alan West, for one, raised a stink about it, but was quickly shushed by the (all bow) Leadership. Talk radio blowhards were screaming about this for weeks leading up to the hustled passage of the two month extension.  Rush even predicted outright that, while the payroll cut would expire on schedule, the mortgage tax (called a "fee," but come on) would be on the books forever, even after the extension had been fully paid for. Oh, but, ha ha, the mortgage tax doesn't go to the Social Security Trust Fund, but will simply go into the general fund black hole along with every thing else.  

More important, I do seem to recall some news stories (and maybe even the president) mentioning in passing that the extension would be "paid for" by a modest mortgage fee. But, typically for this sort of thing, no one thought to ask about the size of the fee, the manner it would be imposed, the lifespan of the fee, etc. No, all the stories were the usual process questions about what legislative maneuver would be used to push the extension through. 

It's the same way health care reform reporting was done. The bill was out there for all to see, but news coverage before the vote focused on the ephemeral moments of drama as the bill wound its way through Congress (remember the Slaughter Rule?) It was only after the bill passed that mainstream journalists began to tell us what was actually in the bill. And, two years later, we're still finding new stuff in there.

Technically, I know we have a free press, and certainly the MSM is not the only outlet for news. But, the big time media (the networks, the newspapers, CNN & MSNBC) really is a de facto arm of the government, reporting on legislation in a manner that virtually ensures its passage or defeat.   

Anyone who purchases a mortgage will be paying hundreds or thousands of dollars because, in late 2011,  Barack Obama's political team wanted a cute "tax cut" imbroglio to hang on their Republican opposition. The cut was the most penny-ante cut possible (and one that a Republican president could never obtain because it drains the sole funding source for Social Security) yet the funding mechanism lasts decades. And the Republican leadership went along with it for no better reason than the Democrats' allies in the media were screaming bloody murder, even as they only told half the story. 

No comments:

Post a Comment