Looking Ahead to Housing Policy

Tax cut extension legislation was signed into law and the Federal Reserve continued to expand its holdings of government securities and maintained a federal funds rate ranging from 0 to 1/4 of percent. - Courtesy of SnortReport

The end of 2010 generated important housing policy-related news. As we begin the new year, now is a good time to consider those events and issues that will shape federal housing policy debates in 2011.

Despite the extension of the 2001 and 2003 tax cuts, tax policy debates will once again feature prominently in 2011.

The tax extender legislation, H.R. 4853, will reduce tax collections by about $374 billion in fiscal year 2011 (it will reduce tax collections by $858 billion over the next ten years in total). As a result, we expect the federal budget deficit to come in around 9.7 percent of GDP for 2011 (approximately $1.5 trillion), as compared to an estimated 8.8 percent of GDP deficit for 2010.

Given this fiscal environment, public finance issues are likely to be a focus of January's State of the Union address. It will be interesting to see what tax and spending proposals are highlighted. Some speculation has focused on efforts to lower the U.S. corporate income tax rate. Any tax breaks could help landscape businesses. If more public funds are available it could be filtered to landscape improvements.

- Courtesy of NAHB