Rebates for home builders weighed
Today, Congress is considering extending a rule that would allow home builders to apply any current losses to tax returns up to four years back. That could set builders up for big rebates. Jeff Tyler has more.
Construction workers build new homes in San Ramon, Calif. (David Paul Morris/Getty Images)
More on The Economy, Taxes, Housing - Real Estate
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Renita Jablonski: In the wake of the subprime mortgage meltdown, Congress is considering some tax relief. This one isn't for homeowners. Instead, it would help home builders through what is, in effect, a tax rebate. Not everyone likes the idea, as Marketplace's Jeff Tyler reports.
Jeff Tyler: The bill would extend the so-called "net operating loss carry-back rule." It would allow home builders to apply current losses to tax returns going back four years. By applying those losses to years when business was good, companies could get significant rebates from Uncle Sam. Terry O'Sullivan is general president of the Laborers' International Union of North America. The union opposes tax relief for corporate home builders.
Terry O'Sullivan: In 2006, they had a $100 billion in revenue, of which they made $16 billion. And two years later, they're standing in line like pigs at the trough, asking for billions of dollars in a taxpayer handout.
O'Sullivan says the builders are partly to blame for the housing bubble, since many of these companies also made subprime loans. The bill has already passed the Senate. Now it moves to the House.
I'm Jeff Tyler for Marketplace.
