$15,000 Home Buyer Tax Credit Rejected For Cash For Clunkers Bill

It’s Cash for Clunkers - but for home buyers.

That’s how Sen. Johnny Isakson (R-Ga.) described his $15,000 home buyer tax credit proposal.

The proposed legislation would have given a $15,000 tax credit to any home buyer who bought a home, regardless of income. Sen. Isakson’s proposal would have also extended the date of the proposal for a full year from the date of enactment, making home buyers eligible for the tax credit well into 2010.

The proposed $15,000 home buyer tax credit was supported by the National Association of Realtors (NAR), the National Association of Home Builders (NAHB) and the Mortgage Bankers Association of America (MBA) - three of the strongest lobbying organization in Washingon, D.C.

(FYI: The Realtors are said to be the top lobbyists.)

At one point, even Shaun Donovan, Secretary of the Dept. of Housing and Urban Development (HUD) was considering it.

But last week, the Senate voted 47 to 50 against lumping Sen. Isakson’s proposed tax credit in with the $2 billion infusion destined for Cash for Clunkers. Isakson then voted against spending an extra $2 billion on Cash for Clunkers. Tit for tat: It’s the Washington way.

Proponents of the bill said it could mean an extra 500,000 homes sold over the year the tax credit is available, or about 9 percent of the total number of homes sold in 2008.

Follow this link for more details on the bill and my take on how it will affect the economy if it's passed.