Why do we need earned income credit? (dollar, money, federal)
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To encourage the big investment risk involved in buying a home?
???
In my experience, renting entails much greater risk. Renters face ongoing risk of rent increases, gentrification, displacement. In the long run, renting is almost always much more expensive than owning, because rents typically go up and up and up, while a fixed rate mortgage means your mortgage payment is never going to increase. (Renters should have it so good!)
Right now, owning is cheaper than renting in something like 48 of the top 50 US markets. Home prices may rise and fall, but rents usually just keep going up, so I'll take the "risk" of owning a home any day if I could.
In my experience, renting entails much greater risk. Renters face ongoing risk of rent increases, gentrification, displacement. In the long run, renting is almost always much more expensive than owning, because rents typically go up and up and up, while a fixed rate mortgage means your mortgage payment is never going to increase. (Renters should have it so good!)
Right now, owning is cheaper than renting in something like 48 of the top 50 US markets. Home prices may rise and fall, but rents usually just keep going up, so I'll take the "risk" of owning a home any day if I could.
I've rented before, and you are not locked into a thirty year lease. All you pay is the rent, so if the AC or plumping breaks down, the landlord in on the hook to pay the repair or replacement costs, and if you are going to be late with the rent, most landlords are willing to work with you. There is a lot more anxiety with owning a home, because all of those unexpected costs are on you, and if you miss payments, the nameless, faceless big bank is not as willing to work with your late payments.
Agreed! If your rented place gets hit with a wicked storm, with large hail, you aren't worried you might be out $5,000 for a new roof, or the sewers might back up, and cause equity killing water damage.
But in most places, property taxes on rental property go up faster than on owner-occupied homes, because many states tax rental prop at higher rates than owner-occupied homes. Also, many states have features (like tax breaks for owner-occupants and property tax caps) that tend to do a better job of restraining homeowner prop taxes than landlord prop taxes (because on average, rental prop is sold more often than owner occ prop and thus reassessed to sale price).
Also, homeowners on average spend much more on maintenance than do landlords; as landlords often defer maintenance or do the least necessary.
Agreed! If your rented place gets hit with a wicked storm, with large hail, you aren't worried you might be out $5,000 for a new roof, or the sewers might back up, and cause equity killing water damage.
That is all planned for in advance by landlords who insure their properties against such things and pass the costs to their tenants in the form of higher rent. Just like homeowners with any sense insure their homes for such events. With rental property, landlords are in business to make a profit and make sure their expenses are covered by the rent they collect. A landlord who doesn't make a profit will sell his rental property and put his cash into something profitable.
I could also say why should the government subsidize the purchase of energy enhancements with tax credits?
As long as we are importing energy inputs from foreign sources (e.g. foreign oil), subsidizing energy efficiency might make sense, depending on how the number crunching works out.
Keeping our dollars in this country- as opposed to sending them overseas - is worth something. Whether it is worth the current tax credits, I do not know.
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