" Home Builders (You Heard That Right) Get a Gift"--BILLIONS (NYT)

[KoKo]

Article goes on to say that the builders like Houvnanian and PULTE will use the money to buy more land and build more houses. :eyes: Why didn't Obama use his pen to strike out that give away to the builders? Or, at least express some disgust with it? Where's my bailout with almost 0% interest in savings account or CD's? What about those close to retirement who had their IRA/401-K hit and their houses crashing in value?

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November 15, 2009
Fair Game
Home Builders (You Heard That Right) Get a Gift
By GRETCHEN MORGENSON

ON Nov. 6, President Obama signed the Worker, Homeownership and Business Assistance Act of 2009 into law, extending unemployment benefits by 20 weeks and renewing the first-time homebuyer tax credit until next April.

But tucked inside the law was another prize: a tax break that lets big companies offset losses incurred in 2008 and 2009 against profits booked as far back as 2004. The tax cuts will generate corporate refunds or relief worth about $33 billion, according to an administration estimate.

Before the bill became law, the so-called look-back on losses was limited to small businesses and could be used to counterbalance just two years of profits. Now the profit offset goes back five years, and the law allows big companies to take advantage of it, too. The only companies that can’t participate are Fannie Mae and Freddie Mac and any institution that took money under the Troubled Asset Relief Program.

Among the biggest beneficiaries are home builders, analysts say. Once again, at the front of the government assistance line, stand some of the very companies that contributed mightily to the credit crisis by building and financing too many homes.
This is getting to be a habit: companies that participated on the upside and are now reaping rewards from the taxpayers on the downside. The banks that underwrote so many dubious loans, for example, received government aid to get them lending again. Unfortunately, that hasn’t been the result.

-snip-

“I AM surprised that home builders are getting hundreds of millions of dollars given that many have very strong balance sheets,” said Ivy Zelman, chief executive at Zelman & Associates, a research firm. “We question the public policy decision to gift home builders with capital that many will not use to create jobs, since they admit that job growth will be dependent not on capital, but on improving demand.”

When Mr. Obama signed the law, his administration said the tax break would help “struggling businesses.” But as Ms. Zelman pointed out, many large home builders are sitting atop mountains of cash. Pulte Homes, which will receive refunds exceeding $450 million under the new law, has $1.5 billion in cash and cash equivalents on its balance sheet, according to its most recent financial statement.

[DrDan]

1. of course they would never consider anything similar for ordinary individuals

say you lose your job last year - average your income for the past years back to 2004 and refigure taxes.

Of course not . . .

Gotta help out big-business. Never enough profit - gotta have more.

Exactly who is drafting these tax laws (rhetorical - we know the answer to that)

[Bluenorthwest]

2. There used to be 'income averaging'

which was useful for those of us who had big years and small. Reagan ended that.

[DrDan]

4. exactly the point - if one administration can end it, another can revive it

if there was any interest to do so.

That would depend on which special interest would profit.

[madrchsod]

3. mr president can you spare us a dime?

[Dr.Phool]

5. Time to go on a taxpayers strike.

It seems they have money for every group except the people who pay taxes.

[jgraz]

6. "Why didn't Obama use his pen to strike out that give away"

Because, when it comes to economic policy, he's not on our side. How obvious does he have to make it?