Possible Handout For Corporate Homebuilders
Corporate homebuilders could receive billions of dollars in tax breaks under a provision of the Foreclosure Prevention Act currently pending in Congress, according to the recently released report by the Laborers’ International Union of North America (LIUNA). The Foreclosure Prevention Act is being held up as a way to help struggling homeowners, but under the bill’s carry-back provision, builders would get billions in tax breaks. The carry-back provision would allow homebuilders to apply losses from 2006 and 2007 as far back as five years against taxes paid on profits. The LIUNA report shows the carry-back provision could further decimate the housing market by providing an incentive for builders to dump existing inventory at any price, knowing they could carry the loss.
Employers Enhancing 401(k)s to Compensate Retirement Changes
Many companies that shift from traditional defined benefit (DB) pension plans to defined contribution (DC) plans, such as 401(k)s, are enhancing contributions to their DC plans, according to a recent survey by Watson Wyatt Worldwide. The survey of 300 large employers found that 40 percent have replaced their DB plan with a DC plan as their main retirement vehicle for new hires in the past 10 years. More than three-quarters of these companies made enhancements to their DC plan after freezing or closing their DB plan, with 52 percent introducing or increasing a non-matching contribution. Ninety-seven percent of companies surveyed contribute to their employees’ DC plans.
Bipartisan Proposal to Encourage Development of Renewable Energy
Sen. John Ensign (R-NV) and Sen. Maria Cantwell (D-WA) led a bipartisan group of senators to announce a bill to encourage the development of renewable energy and expand energy efficiency in buildings, homes and appliances. The Clean Energy Tax Stimulus Act of 2008, authored by Ensign and Cantwell, extends incentives to encourage renewable energy. Extending the placed-in-service deadline through 2009 for the Production Tax Credit encourages electricity production using renewable energy resources such as geothermal, wind, biomass, hydropower facilities and more. These renewable energy plants will have valuable tax stability for 10 years. Studies have shown that the Production Tax Credit and Investment Tax Credit for renewable energy projects would help create 120,000 employment opportunities and bring almost $20 billion in economic investment into the country. Ensign and Cantwell’s bill has six Democratic co-sponsors and 14 GOP co-sponsors.
