Hot Air reader Gregg G points out a strange notion from President Obama in his press conference a week ago. He tried to take credit for the lower interest rates, telling America that refinancing is just another tax cut:
We’ve already seen a jump in refinancings of mortgages as homeowners take advantage of lower rates. And every American should know that up to 40 percent of all mortgages are now eligible for refinancing. This is the equivalent of another tax cut, and we’re also beginning to see signs of increased sales and stabilizing home prices for the first time in a very long time.
Refinancing a home mortgage would be like a tax cut … if you got your mortgage from the government. Unless you’re making your house payments to the IRS, though, it’s not like a tax cut at all. A tax cut means the government gets less of your money, not that you have more money because you make a better deal on your loan. Using that logic, a pay raise would be like a tax cut, a birthday gift would be like a tax rebate, and finding a quarter on the sidewalk would be like getting an earmark from John Murtha.
In fact, as Gregg pointed out to me in his e-mail, a renegotiated mortgage rate means paying less interest. After the first year and writing off the closing costs, that would mean a smaller tax deduction … which in fact means more tax, not less.
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