Everett mortgage-Obama Tax Credit just hot air

Another Useless Idea

Will the new jobs tax credit affect Everett real estate? Will it help with homes for sale in Everett?  Will it change an FHA mortgage rate?

I am sorry Mr. President but the new credit will not help. I think this is nothing more than a publicity stunt. Unless this is truly the hand of someone so ignorant of how jobs are created that Mr. Obama doesn’t realize this will not make a single new hire happen.

Unfortunately here is what will happen. If you are in business a tax credit of $5000 plays no part in the decision you make on whether you hire or not. You have to have the business sales to justify the cost of the hire. If I have the sales then I will hire if I don’t $5000 will not make me hire. All the other terms and strictures are nonsense.

Let’s review the “benefits” of the credit and see if it will affect Everett real estate. Let’s see if FHA mortgage rates will go down. Let’s see if this will produce jobs and help homes for sale in Everett. The 2 main ideas are as follows:

1)      Businesses will receive a $5,000 tax credit for every net new employee that they employ in 2010. The total amount of credit will be capped at $500,000 per firm, to ensure that the majority of the benefit goes to small businesses.

2)      Small businesses will be reimbursed for the Social Security payroll taxes they pay on real increases in their payrolls. Specifically, firms that increase wages, expand hours or hire new workers would get a credit against the added payroll taxes that result. This bonus would be based on Social Security payrolls, so it would not apply to wage increases above the current taxable maximum of $106,800.

Look carefully at item number 1. As I stated above there is no reason or justification to hire unless the sales are already there. So any hire will have happened regardless of any credit. This is another drain on tax receipts with no benefit to the taxpayer.

Item number 2 is just another federal giveaway that doesn’t improve or enhance hiring. Again this is another drain on tax receipts with no benefit to the taxpayer.

This tax credit is just another useless giveaway that accomplishes nothing. It will not help improve the market for homes for sale in Everett. It will not improve FHA mortgage rates and it will not help Everett real estate.

Jim Johnson and comments are always welcome

Everett Mortgage on Line.