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Payroll ‘Tax Cut’ Paid For By Mortgage Hike

From, of all places, the Associated Press:

Payroll tax cut bill boosts cost of new mortgages

By ALAN FRAM | AP – Sat, Dec 17, 2011

WASHINGTON (AP) — Who is paying for the two-month extension of the payroll tax cut working its way through Congress? The cost is being dropped in the laps of most people who buy homes or refinance beginning next year.

The typical person who buys a $200,000 home or refinances that amount starting on Jan. 1 would have to pay roughly $17 more a month for their mortgage, thanks to a fee increase included in the payroll tax cut bill that the Senate passed Saturday. The White House said the fee increases would be phased in gradually…

And never mind that will the current price of houses, most mortgages would probably be for twice that amount, if not more.

Two more months of the Social Security tax cut amounts to a savings of about $165 for a worker making $50,000 a year.

Which is just going to make the economy skyrocket and employers start hiring like mad.

Meanwhile, the payroll tax — which is not even really a tax, but a contribution to your Social Security and Medicare insurance — is the only "tax" that almost half of the country pays to the federal government. (Since 47% pay no income tax at all.)

So what this really comes down to is Obama and the Democrats want people who are hardworking and responsible enough to qualify for a mortgage these days to pay for the Social Security and Medicare for their constituents.

That is what they call ‘social justice.’

To cover [the] $33 billion price tag [for the two-month extension of a payroll tax cut and long-term unemployment benefits], the measure increases the fee that the government-backed mortgage giants, Fannie Mae and Freddie Mac, charge to insure home mortgages. That fee, which Senate aides said currently averages around 0.3 percentage point, would rise by 0.1 percentage point under the bill. The increase will also apply to people whose mortgages are backed by the Federal Housing Administration, which typically serves lower-income and first-time buyers

About 9 in 10 new home mortgages are backed by Fannie Mae, Freddie Mac and the FHA.

Which means every new mortgage will face this increase. Which will do wonders for the housing market and construction industry.

And wasn’t the housing market collapse what caused this recession in the first place?

This article was posted by Steve on Wednesday, December 21st, 2011. Comments are currently closed.

One Response to “Payroll ‘Tax Cut’ Paid For By Mortgage Hike”

  1. Astravogel says:

    Deja’ Moo, or, I’ve heard this bull before…

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