Want to know what I pay in “rent” every month? Brace yourself.
- Property tax: $300
- Homeowner’s insurance: $126
Total: $426.
That’s it. Four hundred and twenty-six bucks a month for a nice home in a nice neighborhood. No landlord jacking up my rent at every lease renewal. No bank skimming interest off my paycheck for 30 years. Just Caesar’s cut and the insurance company’s cut. The rest of my money stays where it belongs—with me.
Now, I’m not going to pretend that’s the whole story. Roofs die. Water heaters die. Air conditioners die (and in Florida, a dead air conditioner is a five-alarm emergency). So let’s be generous and throw in another $300 a month for maintenance. That puts my true “rent” at roughly $726. Try finding a decent apartment anywhere in Florida for that. I’ll wait.
Here’s the bottom line: housing you own outright is the cheapest housing you’ll ever have. Renters pay their landlord’s mortgage, taxes, insurance, and profit. Mortgage holders pay a bank for the privilege of borrowing. The outright owner pays neither. He’s cut out every middleman except the two he can’t escape.
And cheap housing isn’t just a nice perk. It’s freedom. A guy who isn’t shelling out $2,000 a month to a landlord or lender can take a lower-paying job he actually likes. He can weather a layoff without panicking. He can retire earlier, give more to the causes he cares about, and tell a tyrannical boss to pound sand if it comes to that. A paid-off house is the closest thing to a fortress the average American can build.
So here’s my question: If outright home ownership is the cheapest form of housing—and the most liberating—shouldn’t our government be doing everything it can to help Americans achieve it?
Instead, what does Washington do? It rewards debt. The mortgage interest deduction pays you (well, some of you) to stay in hock to the bank. Meanwhile, the guy who works a second job so he can pay off his house early gets taxed on every extra dollar he earns, payroll taxes included. We subsidize the leash and tax the guy trying to slip it.
Let’s flip that around. Here’s my modest proposal: the Home IRA.
- Any income earned from overtime or a second job is completely tax-free—no income tax, no payroll tax—as long as it’s deposited in a Home IRA.
- Money in the account can be invested, and it grows tax-free.
- The account holder closes the account to buy a home or pay off the one he already has.
That’s it. No means-testing. No 400-page rulebook. No new army of bureaucrats. Just a straightforward deal between the government and the governed: work extra, own your home sooner.
Why tie it to overtime and second jobs? Because I don’t want to reward anyone for shuffling money from one account to another. I want to reward hustle. The Home IRA wouldn’t hand anyone a dime. It would simply stop the taxman from standing between a hardworking American and the deed to his house.
Think about what this would mean for a young couple. He picks up weekend shifts. She does some freelance bookkeeping on the side. Every extra dollar goes into the Home IRA, untouched by the taxman, compounding in an index fund. In ten or fifteen years, they’re not just homeowners. They’re outright homeowners, paying a few hundred bucks a month in “rent” while their peers are still writing fat checks to the bank.
Debt is a leash. A paid-off house is a fortress. If our government truly cared about the liberty of everyday Americans, it would stop subsidizing the former and start helping more of us build the latter.
The Home IRA is a damn good place to start.
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