There was a disturbing story in Yahoo News today. The headline was: New-home sales plunge 33 pct with tax credits gone. But that was not the disturbing part of the story.

http://finance.yahoo.com/news/New-home-sales-plunge-33-pct-apf-1718773153.html?x=0&.v=1

The troubling part was buried toward the end of the piece where it was noted that the median price for a new was $200,900, and the average amount of taxes collected on the construction of a new home is about $90,000.

In other words nearly 50% of the price of a $200,000. home is not labor, not materials, but taxes. And I realize the comparing the median price for a new home to the average amount of taxes collected is not exactly apples to apples. Still the figures are startling.

The government had been offering a 6-8,000. tax credit against the purchase of a new home, but this credit expired. In light of the amount governments collect on the construction of a new residence, this tax break seems paltry indeed.

If the government wasn’t soaking everyone for nearly half the amount of the $200,000. home it would cost only $110,000.  Wouldn’t that do wonders for the housing market?

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