03 December 2014

Mortgage and Debt Relief: A Middle Class Subsidy

In financial circles there are rumbles concerning the extension of the Mortgage Forgiveness Debt Relief Act. Normally if you're granted relief, the amount that you were forgiven is counted as a loan, as income and thus is taxable.

There has been an exemption for some time and it has been extended more than once, but if the Lame Duck congress doesn't extend it once again, then many people will be forced to pay taxes on the amount forgiven. This would of course defeat the whole point of giving the 'relief' in the first place.

Of course this was all funded by taxpayer money. The banks were given massive sums of money to incentivise and finance the restructuring of the loans and the forgiveness that went along with it.

Now I'll grant that many people were taken by corrupt brokers and in some cases didn't understand what they were getting into with adjustable rate mortgages etc...

But again, it's interesting that many of these middle class people don't realize that not only are they being given tens of thousands of dollars in subsidies, they don't even have to pay taxes on it. If their uncle Joe had given them the money, that would be taxable. They're getting the benefit free and clear.

But again, the poor who take some assistance to help pay a utility bill or to supplement their grocery bill... they're morally dubious?

Some of these middle class people have taken more to redo their mortgages than some poor families would ever take even over the course of their lives.

Who was foolish with their money? Who fell prey to greed and envy?

And how many of these same people who take the tax money are quick to slander the poor?

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