Help or Hindrance!
I was reading today in U.S. News
& World Report that home improvement spending is down for 2014. I’m not
going to repeat the boring details, but the one point that stuck out for me was
many of the tax incentives that made it inviting for homeowners to spend money
to improve their home had expired in 2013. That begs the question, how successful
are these incentives.
On the one hand, you could argue that
these incentives helped a lagging industry, but on the other hand, you could
also argue that they only made people who were going to do improvements to
their home just move up the calendar. It reminds me of cash for clunkers. You
may remember this government program that was put in place to jump start the
auto industry. Most of the information that I have read about the program is
that it only moved up the calendar for people who would have bought in
the near future.
I was in Home Depot the other day. And
a man came up to me and wanted to talk about Solar for my home. He pressed that
the tax incentives were going to run out soon. Now his sales pitch did not work
for me, my response to him was that when they are able to get solar landscape
lights to work for more than 3 weeks I may think about it. Now I was having a
little sarcastic fun with this salesman, but again I have to ask, if it takes a
tax incentive to get me to move on Solar heating for my home, what is the long
term prospects for this industry or any other that needs tax incentives.
I have to admit, I do not like the
government picking and choosing industries to incentivize. If I need a
dishwasher, is it not in my best interest to find one that is energy efficient.
Do I need the government to give me an incentive to buy an efficient one
compared to an inefficient one? While these incentives help people who are in
the market, or are thinking about buying the incentivized Item, they only are a
cost to the rest of us, and there is no proof that in the long run it helps the
Now I am always in favor of people
keeping more of their money, but I think it would be much better to let
everyone keep more of their money and spend it where they want. That would help
everyone, not just certain favorite industries.
I started this article talking about how home improvement spending is down for 2014. One great way to help this
industry is to take the shackles off the banks and allow them to start lending
to home buyers. When people buy a home, they spend money to make it more to
their liking. No incentive needed, people want to buy homes if the road blocks