Tim Manni of HSH Associates Financial News Blog says that the recently enacted Worker, Homeownership and Business Act of 2009 benefits those who have caused the economic crisis:
When a bill that included the extensions of both the homebuyer tax credit and unemployment benefits was circulating through Washington, most of chatter surrounding the legislation had to do with the former rather than the latter.
However, there was another aspect of the bill that no one seemed to hear very much about: “a tax break that lets big companies offset losses incurred in 2008 and 2009 against profits booked as far back as 2004,” writes the New York Times.
Who stands to reap the greatest reward from the tax breaks which are estimated to be worth upwards of $33 billion? Some analysts say home builders.
Tim tries to find some upside to the home builder break by asking this question: “Will this extra money at least be used to generate job growth?”
From the responses we’ve read so far, the answer seems to be “no.” The consensus is that job growth is more closely conjoined with overall economic recovery, not cash reserves.
The tenor from the builders is that the money will be used to buy more land, support their current operations “and, when market conditions improve, fund future growth and expansion,” said Caryn Klebba, a spokeswoman for Pulte Homes.
The more things change, the more they stay the same.
2 responses so far ↓
1 Tim Manni // Nov 18, 2009 at 5:34 pm
Hey Tax Lawyer,
Thanks for the mention!
I’m sure other business’s besides home builders will reap some cash from this legislation, but you hit the nail on the head: “The more things change, the more they stay the same.”
Is throwing more cash at these groups really necessary. If you found this info interesting, check out our latest post — a Realtors’ survey finds only 6% of buyers said that the homebuyer tax credit was their main reason behind their purchase of a home. Hmmm, not too long ago, the NAR claimed that number was about 50% (http://blog.hsh.com/?p=6880).
Keep up the good work,
Tim
2 Tax Credit Not a Big Incentive for New Homebuyers // Nov 19, 2009 at 12:10 am
[...] Does New Homebuyer Credit Reward Housing Crisis Culprits? [...]
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