Letters: Incentives for Homeowners (and Protection for Renters)

Incentives for Homeowners (And Protections for Renters)

To the Editor:

In “Owning a Home Isn’t Always a Virtue” (Economic View, July 14), Robert J. Shiller looked to Switzerland’s relatively low homeownership rate to make the case that the United States should rethink policies that promote owning a home — and should strengthen laws related to renting.

There is a better, closer-to-home example of a place with relatively favorable landlord-tenant rules: New York City. Many of its rental units are covered by rent controls, and many tenants have strong protections against rent gouging and eviction. By contrast, renters in many other cities are at the mercy of landlords who may wish to take advantage of a strengthening market to force them out through a large rent increase or a refusal to renew a lease.

Professor Shiller lauds the flexibility that renting provides families, allowing them to relocate easily for better jobs. But for tenants facing a rent increase or worse in many American communities, good commutes to work can be lost, advantageous child care or schooling options can be disrupted, or a social support network can be upended — all at a landlord’s whim.

I agree with Professor Shiller that we need to review our landlord-tenant law to help families plan their futures.

RAY BRESCIA

Albany, July 15

The writer is an associate professor of law at Albany Law School.

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To the Editor:

Professor Shiller asks: “In today’s world, is it wise for the government to subsidize homeownership?” Two prominent Americans of vastly different political views apparently have an answer for him.

The first said: “A nation of homeowners, of people who own a real share in their own land, is unconquerable.”

The second said that “an ownership society” is being created in our country, “where more Americans than ever will be able to open up their door where they live and say, ‘Welcome to my house, welcome to my piece of property.’ ”

Who are these two Americans? The first was Franklin D. Roosevelt, and the second was George W. Bush.

RICHARD S. COLMAN

Orinda, Calif., July 15

Letters for Sunday Business may be sent to sunbiz@nytimes.com.

Letters: Incentives for Homeowners (and Protection for Renters)

Incentives for Homeowners (And Protections for Renters)

To the Editor:

In “Owning a Home Isn’t Always a Virtue” (Economic View, July 14), Robert J. Shiller looked to Switzerland’s relatively low homeownership rate to make the case that the United States should rethink policies that promote owning a home — and should strengthen laws related to renting.

There is a better, closer-to-home example of a place with relatively favorable landlord-tenant rules: New York City. Many of its rental units are covered by rent controls, and many tenants have strong protections against rent gouging and eviction. By contrast, renters in many other cities are at the mercy of landlords who may wish to take advantage of a strengthening market to force them out through a large rent increase or a refusal to renew a lease.

Professor Shiller lauds the flexibility that renting provides families, allowing them to relocate easily for better jobs. But for tenants facing a rent increase or worse in many American communities, good commutes to work can be lost, advantageous child care or schooling options can be disrupted, or a social support network can be upended — all at a landlord’s whim.

I agree with Professor Shiller that we need to review our landlord-tenant law to help families plan their futures.

RAY BRESCIA

Albany, July 15

The writer is an associate professor of law at Albany Law School.

•

To the Editor:

Professor Shiller asks: “In today’s world, is it wise for the government to subsidize homeownership?” Two prominent Americans of vastly different political views apparently have an answer for him.

The first said: “A nation of homeowners, of people who own a real share in their own land, is unconquerable.”

The second said that “an ownership society” is being created in our country, “where more Americans than ever will be able to open up their door where they live and say, ‘Welcome to my house, welcome to my piece of property.’ ”

Who are these two Americans? The first was Franklin D. Roosevelt, and the second was George W. Bush.

RICHARD S. COLMAN

Orinda, Calif., July 15

Letters for Sunday Business may be sent to sunbiz@nytimes.com.

Bucks Blog: Incentives to Start a 529 College Savings Plan

EPA Students at Morehouse College’s commencement ceremonies.

College graduation season is in full swing, marking an annual rite of passage — and serving as a reminder that higher education isn’t getting any cheaper. One option available to help families put away money for college, and avoid borrowing too much, is a 529 college savings plan.

In general, 529 plans are college savings and investment accounts sponsored by state governments. Money deposited in the accounts grows tax free, as long as the funds are used for educational purposes when withdrawn. You don’t have to be a resident of a particular state to use its plan, although some states offer additional tax benefits to in-state plan participants.

Most 529s are designed as traditional savings-and-investment vehicles, but some states offer prepaid 529 plans, which allow savers to pay tuition at certain schools in advance at current rates.

To raise awareness of the savings plans, the College Savings Plans Network, a nonprofit group that represents the plans, is promoting Wednesday (that is, 5/29), as National 529 College Savings Day. More than 30 states are organizing events to promote their 529 plans, and some are offering incentives for families to create accounts.

Florida, for instance, is waiving the $50 enrollment fee for plans opened from May 20 through June 30.

Washington State is also waiving a $50 enrollment fee, for plans meeting certain conditions; the account must be established by midnight Wednesday.

And Utah is offering matching contributions of $25, for accounts opened on Wednesday with contributions of at least $25.

The College Savings Plans Network itself is offering a chance to win $529 toward a new or existing savings plan. To enter, you must “like” the network on Facebook.

The network has created an interactive map showing what various states are doing. To see what your state’s plan is offering, click on your state.

Do you take part in a 529 savings plan? If not, will your state’s promotional event entice you to start?

You're the Boss Blog: Small-Business Tax Incentives Survive the Deal

How small-business issues are shaping politics and policy.

Most of the discussion about the last-minute legislation to avert sharp tax increases for 2013 has concentrated on the Bush tax cuts — their permanent extension for most Americans and their expiration for a very few. But the bill also renews dozens of other income-tax provisions for individuals and businesses through a series of provisions that the legislating class calls “extenders.” And though advocates for small businesses were concerned that legislators might overlook their interests in the high-pressure negotiations, it turns out that their pessimism was unfounded. Nearly all of the most important provisions won a reprieve through at least this year. (It just goes to show that an old temporary tax credit almost never dies, it just becomes an extender.)

Here’s where things stand for many of the small-business tax incentives that were on the table:

•Section 179 expensing: This popular provision allows small companies to fully expense many investments in just one year, instead of over five years or more. The amount of investment eligible for immediate expensing grew to $500,000 in 2010 and 2011, but was to fall to $139,000 in 2012 and $25,000 in 2013. The new law extends the $500,000 limit through 2013, and pushes the $25,000 cap to 2014. Section 179 is available only to companies with total capital expenditures for the year under a certain threshold — $2 million through 2013 and $200,000 starting in 2014.

•Bonus depreciation: Since 2008, companies have been able to take advantage of a special depreciation allowance that allows them to write off 50 percent (and sometimes more) of certain kinds of investment in the first year. The provision was set to expire at the end of 2012, but has been extended through the end of this year, or, in some cases, through 2014.

•Research and Experimentation Tax Credit: The R&D tax credit, as it’s also known, expired at the end of 2011. The new law extends it through 2013 and increases the potential credit for businesses that acquire other companies.

•Built-in gains tax: Normally, when a company converts from a C corporation to an S corporation, it must retain its assets for at least 10 years or pay a 35-percent tax on the built-in capital gains that occurred before the company made the conversion. (The provision is intended to discourage a corporation from making the conversion simply to avoid double taxation — first at the corporate level, then at the shareholder level — on capital gains.) Since 2009, Congress has shortened the period, ultimately to five years for assets sold in 2011. The new law extends the five-year period through 2013.

•Temporary exclusion of 100 percent of gain on small-business stock: This recent stimulus provision, an incentive to invest in small companies by making the capital gains tax-free, expired at the end of 2011 but has been extended through 2013.

•Work opportunity tax credits: These are tax credits for employers who hire military veterans or people belonging to certain disadvantaged groups (for example, people receiving government assistance or living in distressed areas). Tax credits for hiring the disadvantaged expired in 2011 and those for veterans expired at the end of 2012; both have been extended through 2013.

•Fifteen-year depreciation for qualified improvements to leasehold, retail or restaurant property: Under this provision, which expired in 2011, a renter, retailer, or restaurateur can write off improvements in 15 years, rather than over 39 years (which may be longer than the business would even exist). It has been extended through 2013.

•Adjustment to stock of S corporations making charitable contributions: This temporary provision made it easier for owners of an S corporation to take deduction for making donations. It expired at the end of 2011 but now is extended through 2013.

•Enhanced charitable deduction for contribution of food inventory: This provision allowed companies to donate their inventory of “apparently wholesome food” — that’s a legal term, really — and take up to twice the deduction they would normally get. It expired in 2011, but has been extended through 2013. However, a similar provision that allowed C corporations a bigger deduction for donating computer equipment to schools and libraries was not renewed.