The House and Senate are still fighting over extending the so called payroll tax cut that was enacted last year. That cut was in the FICA or Social Security tax. So what government did was cut the amount of money being paid into a system that is already going broke. Democrats say that failure to act will result in a tax increase but the tax will only go back to where it was before they temporarily reduced it. Isn’t this the argument they make regarding the Bush tax cuts? Don’t they say it is not an increase because the rates will only go back to where they were?
In any event, the tax cut needs to be paid for and the government will do this with a PERMENANT mortgage fee. The folks who get a new home or refinance an existing one through either Fannie or Freddie will pay a $15 a month fee (on a $200,000 loan) that will not go away. If the tax cut ends in two months or a year, the fee will continue because it is a permanent fee. The fee will allegedly be used to pay back the loss to Social Security but the reality is that the fee will go into the general fund and be used, as was ALL past Social Security money, to pay for careless spending by Congress.
It is not bad enough that those who can afford to get a home will pay fees to cover a tax cut for those who can’t (or won’t) buy one but the fee will last forever and will not pay back the Social Security money lost.
The fee would amount to $180 a year for a $200k loan and $360 a year for a $400k loan. Over a 30 year loan that would be $5,400 and $10,800 respectively. People who buy or refinance a loan will end up paying this amount of money even if the tax cut ends or if the Social Security tax rate goes up.
This is another wealth redistribution scheme that uses a sneaky way to force people to pay for the fiscally irresponsible government.
The government continues to soak those who produce and try to have a better life. How long will it be before they add some kind of monthly fee to a car loan to pay for green energy?
Why is government hell bent on screwing us and why have businesses become tax collectors in the redistributive States of America?
Think you can avoid this by getting a mortgage where Fannie and Freddie are not involved? Good luck. They are involved in about 90% of all mortgages…
Never surrender, never submit.