Pork

California politicians agreed to pass a bill, which created a new law. The law took sellers of short-sales off the hook for taxes on the debt forgiven by their bank. The law was easy to pass, because sellers of short-sales are already selling their home for less than their loan amount, and they make no money on the sale, so there is nothing to tax, except “forgiven debt.”

Before the new law passed, sellers of short-sales were taxed for such “forgiven debt.”

That was a couple of years ago. Now it’s time to pass a bill to extend that law because it’s expiring. The bill is a piece of cake to pass, because the politicians can swallow its ingredients easily. But one of the politicians threw some pork into the mix at the last minute, and the other politicians gagged.

“Pork” in the language of politics refers to a politician stuffing a bill to get tax money for a pet project. In this case, the project is the California Homes and Jobs Act, which has nothing to do with short-sales, but was nevertheless stuffed into the short-sale bill.

The California Homes and Jobs Act would be funded by a new $75.00 tax for recording real estate documents not related to sales, but all others, like trusts, quitclaims, and refinancing documents.

The politicians swallowed hard, and passed the bill to extend the short-sale law, including the pork.

The California Association of Realtors (C.A.R.) is snorting-mad the politicians swallowed the pork. C.A.R. supports the short-sale tax-forgiveness bill, but not the new tax.

“C.A.R. is an aggressive advocate for affordable housing,” said a spokesperson,” but believes it is bad policy to fund affordable housing at the expense of home/property owners who need to record real estate documents.  The amendment (the pork) attempts to extort support for the California Homes and Jobs Act.”

The California Homes and Jobs Act supporters say this: “More than 130,000 people are homeless on any given night in California. Every day, families, veterans, people with disabilities and seniors struggle to maintain a roof over their heads. California desperately needs a permanent, ongoing source of funding dedicated to affordable housing development!”

Apparently, the question as to whether the politicians swallowed good pork or bad pork is a matter of taste.