Coming soon: you can use your $8,000 new-home tax credit to make a down payment on your new home.

We’re now several years into a credit crisis caused by people buying homes they couldn’t really afford. And the response? Creating a new incentive to buy more homes — and to borrow money to do it. There is no way this will end up moving prices to an appropriate level, and no way it’s going to make the finance and housing industries change their behavior.

In fact, the main result is to make things even worse: in the past, the government just made borrowing cheaper (through the income tax deduction, which made interest cheaper than… Read more…

Today’s taxosphere is still busy digesting the new bailout, but there’s plenty of other business to discuss. A pair of high-profile tax evasion cases have gotten some attention, the credit crisis is considered in more detail, and the Biden/Palin vice-presidential debate features some gaffes on both sides.

• A the California Tax Attorney Blog, blogger Mitchell A. Port talks up the IRS’s increasing efficiency. Surprisingly, the big gains aren’t just in audits — the IRS has also gotten much better at providing easy online help for average users.
• James Edward Maule, proprietor of MauledAgain asks who is to blame for the subprime meltdown and the bailout, and argues that the answer is much more

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Many bloggers are still processing the effects of the recent financial meltdown and bailout. Here are a few fresh views on that and other matters:

• Five Cent Nickel explains what happens to your mortgage if your bank goes under. Part of the trouble with the mortgage boom was that the mortgage was disconnected from the people who originated it — you might live a block away from your mortgage broker in Dubuque, and have no idea that your mortgage was being traded back and forth between hedge funds in Greenwich, bankers in London, and sovereign wealth funds in Dubai and Beijing. But that disconnect works out in your favor when the bank you have

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