How would the purchase of housing be taxed?
Housing is the single largest expenditure that most families make. The housing industry, including both construction and the resale market, is one of the most important industries in the country. [Fortunately, most of it cannot be imported, so American jobs in the housing industry are secure.] A retail tax on the purchase of homes will be part of the very broad tax base of the STR tax system. It will apply to both new and used homes. If only the 15% of homes that are bought new were to be subject to the tax, the new-home market would collapse and the price of used homes would be driven up sharply. However, a 30% tax upon such an expensive item would be onerous. And, since Americans typically own homes for less than five years on the average, having to pay the tax every time they buy a home would be very onerous. A 30% tax would be especially difficult for the poor.
