cobblestone

Paulson Gets it Right on Housing

I have one concern with the criticism of taxing forgiven mortgage debt. In many instances, as the value of their homes increased, people borrowed excessive amounts against their home equity and financed their lifestyles. In many cases, their total debt exceeded what they paid for the home originally. Should they have worked and earned income/wages to finance their lifestyle they would have had to pay tax on that income. Therefore, I do not believe the rest of society should bear the cost of this forgiven debt.