Senator Kamala Harris introduced legislation to provide rent relief for working families struggling to pay their bills. She explained her Rent Relief Act, would “give back” money to families spending more than 30 percent of their income on rent and utilities.
Under the Rent Relief Act, anyone who spends more than 30% of their income on rent would be eligible for a federal tax credit. What would you do with that extra money in your pocket?
— Kamala Harris (@KamalaHarris) July 28, 2018
Harris must think the amount families will be getting back won’t be “crumbs” like with raises or bonus payouts, but real money, and she wants to know how families are going to spend all of that cash.
The Daily Wire’s Ben Shapiro had a scathing response to Harris’s tax relief plan:
“So, this is stupid,”
“Here’s why. Imagine that you spend $3,000 on rent and make $10,000 in gross income per month. Now the government gives you and everybody like you a percentage back on your taxes. This creates additional demand in the housing market, as everyone who is competing to take your apartment offers the landlord that extra cash. So the cost escalates for your apartment. Here’s what you’ll be using that extra money for: rent.
“This is precisely what happens with every subsidy: you generate more of that which you are subsidizing. If you subsidize rent, you create higher rental prices. Undoubtedly, Harris would then answer that we need rent control – which would lead to less development of real estate, leading to housing shortages. And those housing shortages are supposedly what Harris is attempting to prevent in the first place.”
Shapiro wasn’t the only one who thought the plan was ridiculous:
Buy an economics textbook to mail to your office. https://t.co/yaeKb5OT7c
— Timi (@theboytimi) July 31, 2018
I would donate it to the campaign of politician who understands how stupid of an idea this is https://t.co/Nml0a7KdqF
— Austin Carsh (@Subartoo98) July 30, 2018
OK, we get that this is supposed to appeal to working-class families, but wouldn’t millionaires start renting luxury vacation homes instead of buying them so they’d be eligible for the tax credit too? It can’t be, because that would mean that a Democrat was potentially suggesting a tax cut for the rich.
It’s all pandering anyway, and we’re all pretty sure how it’s going to go. What will you do with all that money?
— kerry (@K1erry) July 29, 2018
Pay the higher rents that result from subsidizing rents. https://t.co/W4n1qCU7JV
— Tim Carney (@TPCarney) July 29, 2018
Probably spend it on my newly increased rent. https://t.co/D5ptjqwCDk
— Freek van Ostrand (@sullenfish) July 30, 2018
Pay more in rent, because without more housing it all gets captured by property owners https://t.co/0bfUl30dxm
— Market Urbanism (@MarketUrbanism) July 30, 2018
This tweet is a joke right? How about the extra money be spent on, let’s see RENT!!! Or how about just learn how to manage money and we would not need a relief act.
— Jim Cronin (@croninjm) July 29, 2018
Does anyone with a basic grasp on economics want to explain to her what this will do to rent prices? https://t.co/39vWNZwWiL
— Teddy Broosevelt (@Room353) July 30, 2018
I’d buy rental properties in low-income areas and double the rents. https://t.co/kZVYXJLyOX
— Ben Hunt (@EpsilonTheory) July 30, 2018
As a landlord, I know this policy would increase demand and therefore increase rents, increasing my cash flow, but not really helping renters.
I would probably use the money to buy another rental property. https://t.co/ImxGy0CK6Z
— PoliMath (@politicalmath) July 29, 2018
Landlords: oh please oh please oh please https://t.co/mKBKbhIIzk
— Robert P. Murphy (@BobMurphyEcon) July 30, 2018
that harris and her team thought this was a smart idea has been perplexing me all day. the messaging on it, too. the only folks this would really be “extra money” for are the landlords. this could easily be a parody of the democratic party in 2018 https://t.co/Jo3P4yzWWC
— Brian Sonenstein (@bsonenstein) July 30, 2018
Are you not concerned that a law like this would cause upward pressure on already high rent, since the incremental cost would effectively be subsidized by tax credits?
— Brian Kibler (@bmkibler) July 28, 2018
So I get incentivised to spend more than I can afford through the expense of a taxpayer. Housing demand artificially increases. Prices go up for everyone making it less affordable. Smart. https://t.co/CZwLxo4HVr
— Dan O’Connor (@oconnordan58) July 30, 2018
Landlords are just going to see that tax credit as a licence to accelerate rents. A tax credit without rent control isn’t going to really help anyone. https://t.co/mrXKNoRzYL
— Moisture Fan Account (@ReverendDrDash) July 30, 2018
Incentivizing people to spend more than they can afford on rent with promises that the government will make it up with a tax credit is a terrible idea.
— John Hawkins (@johnhawkinsrwn) July 29, 2018
We’ve seen this played out already with college tuition. How many times do you have to do something to see it doesn’t work? It does the exact opposite.
— Chica’sBailBonds (@irinamoises) July 29, 2018