A quote from today's Wall Street Journal Opinion page:
Millions of Americans have negative equity in their homes, but did not bite off more mortgage than their incomes could support. These people are still paying their mortgages and never imagined doing anything else. Millions of others have positive equity in their homes despite seeing painful declines in their home value. Now all these homeowners are to be taxed to benefit more irresponsible borrowers?
Even worse, the government is rushing to bail out the banks and mortgage institutions that helped get the country into the current mess. Yesterday, the Fed guaranteed a $30 billion credit line to help JPMorgan Chase buy out the collapsing Bear Stearns. And guess who is ultimately guaranteeing that loan? That would be us, the US taxpayers.
If Pam and I aren't in negative equity at the moment, we are darned close--but after everything we put in to build this place, there's no way we'd just walk away. That said, it wouldn't take too much in additional taxes to make our home unaffordable. It is conceivably possible that we could be forced by additional taxation from the "struggling homeowners" column into the "foreclosure crisis victim" column by taxes that bail out homeowners and lenders who took on loans that they never should have.
Whenever society condones a "redistributive" tax program--even those that are intended to "soak the rich," they invariably will negatively impact people who are right on the borderline. This is a great cycle--the government takes your wealth, thereby forcing you into a disadvantaged state. At least you then have the privilege to ask them permission to get some of your own money back. If you're really lucky, you'll even get a bit of someone else's money, too!