Don't Mess With Taxes

Before heading off to a full day of Taxpayer Advocacy Panel sessions here in drizzly D.C., I buzzed through my e-mail alerts and found these real estate articles that y'all might find of interest, consternation or consideration.

We start north of the border, where a new Canadian report says that energy efficiency actually is counterproductive, leading to more, not less, energy consumption. Jim Adair in Realty Times says that the finding is not new:

"Back around 1980, about the time that Canada's R-2000 standard for super energy efficient homes was being introduced in response to the 'energy crisis' of the 1970s, two economists issued papers that became known as the Khazzoom-Brookes Postulate. Daniel Khazzoom and Leonard Brookes argued that improvements in energy efficiency worked to increase, rather than decrease, energy consumption."

That hypothesis is supported in the just-released report by two CIBC World Markets economists. Read the report here and Adair's article here.

Bailout brouhaha: As for buying a home, energy efficient or not, Jon Markman at MSN Money takes issue with the proposal to keep subprime borrowers in the homes they are in imminent danger of losing.

The so-called "teaser-freezer" plan would temporarily freeze low introductory interest rates on home loans made to high-risk borrowers before their introductory rates spike.

On the human level, you've got to feel for folks who soon could be out on the street. But on the economic level, a lot of people are starting to question whether the approach is simply a political attempt to delay the fiscally inevitable.

Markman is in the latter group. He calls it the "financial equivalent of the hair-of-the-dog 'cure' for a hangover" and asks:

"Have we completely lost our common sense? Is it really desirable to provide easier money to people and companies that got into trouble by abusing their access to money in the first place? And is it really a good idea both to cancel mortgage bondholders' contracts for the sake of an adjustable-mortgage-rate freeze and to provide a couple of years of grace for stressed-out home borrowers who are likely to eventually default anyway?"

You can read the rest of the reasons why Markman calls the bailout a lousy idea here.

We have a winner: Actually, taxgirl has a winner of the contest she conducted for law and paralegal students; all they had to do was submit a guest blog post on a tax issue of their choosing.

Caroline Rummel, who's attending the University of Minnesota Law School, took the honor for, in taxgirl's words, her "fresh and interesting perspective on the mortgage interest deduction." Read Rummel's post  here.