Why did I add "Up-To" to the total? I'm glad you asked. Here's how it works:
If you buy a home, you will receive up to $15,000 in refunded federal income taxes over 2 years. This means that if you pay $7,500 or more per year in federal income taxes you will receive the full amount. If you pay less than $7,500 in taxes a year, you will basically get all your federal income taxes back that you paid in 2008 and 2009. It's explained much better in this Bloomberg article.
Now, out of principle, I'm against the stimulus package. One of the reasons it bothers me is quotes like this one from a CNN article about the home buyer tax credit:
"Consumers will view the tax credit as they do lower home prices," said Lawrence Yun, National Association of Realtor's chief economist. "And more people will qualify [for buying homes]."
One of the BIGGEST REASONS for this recession is that people who weren't supposed to qualify to buy homes were buying homes! They found themselves in way over their heads and their inability to pay their mortgages started this mess. We do not need to make it easier for people to get loans and credit. We need people to live within their means! People aren't waiting to buy a house just because of fear. They're waiting until they can afford a house. They've learned their lesson. If you expect home buying numbers to be anywhere close to where they were 2-3 years ago you're out of your mind.
If we can find a way to allow our economy to run on money and not credit, I think we'll be ok. It won't be an easy transition or a short one, but I think it's a needed one.
UPDATE (2/12/09): Just a couple hours after I post this, what happens? The Up-To-$15000 tax credit gets taken out of the stimulus. I FINALLY understand a piece of legislation that directly affects me and it gets changed before it gets passed. Lame!
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