I just want to take a quick poll...

[john]

Originally Posted by Goat Blower

You've obviously didn't own a house more than three years ago as every home owner in the US rode the housing market wave after Clinton forced Fannie and Freddie give everybody a home loan. We all did pretty nicely on that, you wouldn't be so excited about doubling the capital gains tax if you were one of us. And besides that, exactly what do you think the government is going to do for you with that extra money? Show me any government program that is self-sufficient.

First off, the housing market did too well for too long. I knew coming out of HS that it was going to collapse. The price of housing was rising a lot faster than peoples income levels. This is not a sustainable trend.

What happend is that people bought houses when they could hardly afford them banking on the houses gaining in value and being able to make ends meet in the short term as the long term outlook was good. They thought, if I wait a couple years when I can afford this house, it will be another 60k higher and I won't be able to afford it. Everyone was buying a house from an investment standpoint, not for a place to stay for their entire lives.

There is an exemption if someone holds a house as a principal residence (250k and 500k for joint) for 2 years or more. What this did is make is so most homeowners didn't have to pay capital gains tax on the sale of their home. What I am trying to get at is that even if you sold your house now and made $200k, you would most likely not be taxed.

People doing well in the housing market had absolutely nothing to do with the capital gains rates. If you are doing it every couple of years, the exemption applies. If you are flipping houses every few months, it is ordinary income and capital gains rates also don't apply. Only in the 1-2 year mark does the capital gains rate come into play, which is not very often.

If their wasn't demand for the houses, the market wouldn't have soared. The problem was that the demand was triggerred by houses appreciating too fast.

Don't try to get Obama's tax plan tied into the housing crisis as it has not affect on the future of the housing market. The capital gains rates are rare in the housing market.