April 8, 2011 8:34 AM
American homeowners are the beneficiaries of the 6th district federal court's April 6 opinion affirming the Federal Trade Commission's earlier decision prohibiting multiple listing services from blackballing competitors who charge home sellers less than the prevailing real estate sales commission rates. The FTC had earlier ruled that Realcomp MLS's policy of prohibiting discount broker members from advertising their listings on Realcomp's website was nothing more than a transparent effort to maintain high real estate commission levels. The American Homeowners Grassroots Alliance filed a brief in support of the FTC's efforts in that case.
In her decision Circuit Judge Karen Moore concluded that "substantial evidence supports the Commission's findings that: 1) Realcomp's website policy gave rise to potential genuine adverse effects on competition due to Realcomp's substantial market power and the website policy's anticompetitive nature; 2) the website policy in fact caused actual anticompetitive effects; and 3) Realcomp's proffered precompetitive justifications were insufficient to overcome a prima facie case of adverse impact. These findings establish that Realcomp's website policy unreasonably restrained competition in the market for the provision of residential real-estate-brokerage services in southeastern Michigan and the Realcomp MLS area."
American Homeowners Grassroots Alliance President Bruce Hahn thanked Judge Moore for her wisdom and the FTC for it's diligent defense of American homeowners. "This decision means that the issue is dead. Many other MLS's have tried the same tactic, and the NAR invested heavily in this appeal. They have lost every case. It is time for MLS's and industry leaders to put this issue behind them and stop wasting their members' dues money on lost causes that only offend their customers and tarnish the profession's reputation. Instead they should focus instead on how to better serve their clients and their members."
November 11, 2010 10:36 AM
On November 10 the bipartisan Federal Deficit Commission proposed a massive change in federal spending and the tax code. The plan would save $3.8 trillion by 2020 and balance the federal budget by 2040. We congratulate the Deficit Commission for its good work. Unless we reign in the growing deficit our nation will continue to lose jobs, and the future of our children and grandchildren will be bleak.
Everybody can find parts of the proposal they oppose, and most of us can find parts that we like. What's critical is that we support the bottom line. If you don't like specific parts of the plan's tax increases and/or budget cuts you should offer specific alternatives to minimize the pain and/or make up for the difference. For example we're concerned about the Commission's proposed $500,000 cap on the mortgage interest deduction. At minimum it should be indexed to housing values. A flat $500,000 cap would have little impact in many rural areas where you can buy one of the largest and nicest homes in the county for that amount. In pricey cities like Washington DC that will barely buy you a small starter home. A cost of housing index could be applied that would lower the cap in the areas when home prices are lowest and raise it in the more expensive areas.
We'll look at how such a refinement might work out. If it leaves a large share of middle class homeowners unable to deduct all of their mortgage interest costs, then at minimum we'll propose some alternative revenue sources that would fund an increase in the caps. We would like to keep all mortgage interest fully deductible, but that may not be possible in the give and take of the political debate. It may mean that the future owners of a $2 million, 6,000 square foot McMansion can't deduct all of their mortgage interest. This is unfortunate, but perhaps it would help accelerate the trend towards building smaller homes, which are inherently more energy efficient.
Some of the plan's other provisions concern us as well, but we'll also suggest other budget cuts and/or revenue sources to cover other modifications we might suggest to Congress or the Deficit Commission.
This debate will test the mettle of consumers, business interests and politicians. Many will speak out against cuts in their favorite programs or tax deductions, but will not offer alternative sources for revenue to make up the difference. We all owe it to the future of our country and future generations not to take such a gutless approach. Voters should certainly express their views on specific programs and taxes to their legislators, but at the same time they should insist that legislators support the Deficit Commission's bottom line, and come up with alternatives that are least painful to their constituents and most consistent with their own ideology to get there.
September 20, 2010 12:00 PM
Currently there is no tax on estates. However next year the estate tax reverts to previous levels - a $1 million tax exemption per estate. Congress is trying to decide whether to let the estate tax revert to this previous level, extend the ban entirely, or do something in between. We believe that the latter is the appropriate course.
Most estate tax avoidance tools are used to maximize the amount left to children or preserve the family business. In the latter case, Congress should exempt family farms and businesses up to a reasonable size from the estate tax. We should also remove the inequities in the current estate tax with respect to the number of heirs and their circumstances. Some people have no heirs, others have quite a few kids, and in some cases one or more of the latter children may be handicapped and unable to work and/or care for themselves.
The estate tax exemption should be tied to the number of children. Give everyone an exemption of $1 million per child (out of fairness the childless or those with no surviving children should also get a $1 million exemption). This would enable a parent to provide a good retirement nest egg for each child in an era where economic conditions make it unlikely that most able bodied, hard working, and thrifty children are going to be able to save enough for even a modestly comfortable retirement. Give another $1 million exemption for every child that is handicapped and unable to work and/or care for themselves, in order to provide additional support for their special needs. Then eliminate the trusts and other estate tax avoidance tools and apply the estate tax to whatever is left. The exemption should be indexed to 2010 dollars so we don't have to keep revisiting the issue.
This approach aligns well with the primary estate planning goals of most people and would effectively eliminate taxes on most estates. There is no such thing as a "good" tax, but such a structure would reduce concentrations of wealth which have proved destabilizing in many societies. We do need to reduce the deficit, by spending reductions insofar as possible, but we will still need to tax individuals to bring it into balance. This may not be a "good" tax, but it would be a is a less onerous tax on individuals compared to many of the other alternatives.
August 30, 2010 2:12 PM
On August 29, Shaun Donovan, Secretary of Housing and Urban Development, said that the housing market's July was "worse than expected" and that the Administration may support a new homebuyer tax credit. His statement follows similar recent expressions of concern about the overall economy from other senior Obama Administration figures. They too made it clear that the Administration will step in with other economic stimulus measures to rescue a faltering U.S. economy if necessary. With continued signs of a possible double dip recession, among them the recent housing construction and resale data, the first question is whether additional economic stimulus is necessary. If the answer to the that is yes, then the next question is whether put the stimulus resources into housing, and if so in what form.
With U.S. unemployment stuck around 10%, a further erosion of the economy could be devastating. On the other hand, the bailout and stimulus funding approved by Congress at the request of Presidents Bush and Obama in recent years has resulted in a dramatic federal deficit increase that itself is posing a growing risk to the nation's long term economic stability. In fairness, those steps may have prevented an economic depression, but the net result is that we face a policy dilemma.
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More Stimulus for Housing?.
July 16, 2010 9:35 AM
We applaud Congress for passing comprehensive financial services reform legislation. While the legislation is imperfect in the view of most proponents and opponents, until now there has been no new measure in place that would preclude another massive financial meltdown that could have caused another Great Depression. That alone is a significant step forward. It is far better than relying on the memory spans of the small number of senior corporate leaders whose decisions caused the meltdown from preventing its recurrence.
The outcome clearly reaffirms the analogy of the Congressional legislative process to the making of sausage. In the view of many, the legislation does not address all the problem areas. In the view of others much of it is unnecessary and/or harmful. There is probably some truth in both views. Clearly the legislation's effectiveness in many areas will depend on the process of developing the numerous implementing regulations, where the outcomes in each case can range from strong and effective new rules to unintended consequences, and/or a waste of everyone's time.
Based on the history of major reforms, we will probably see some of all three. The legislation will also be revisited many times both to address loopholes and overkill. Both lie in the eyes of the beholders, and will certainly be influenced public opinion regarding financial services sector practices after the regulations have been implemented. Nevertheless there is today less likelihood of a future financial services meltdown than there was yesterday. For that we should be grateful, and thank the sausage makers for all the time and effort they put into the process.
