Will End of Tax Credits Mean Lay-Offs?

John G. Swanson
November 1, 2010
THE TALK... | Markets & Trends

Tax credits for homeowners buying energy efficient windows and doors, passed as part of 2009's stimulus package, will expire at the end of this year. As you'll see in our top news story this week, the Window & Door Dealers Alliance is lobbying to get those tax credits renewed for 2011 and beyond.  A number of WDDA representatives met with Senate staffers last week to make the case.

"Going into December and January without a tax credit in place could mean huge layoffs and the closing of some businesses," says David Sakin of Premier Windows & Building, one of the dealers who participated. "In the spring of 2010, I was finally able to rehire full-time most of my employees that had been cut back since November 2008. I anticipate cutting back or laying off again without a tax credit as incentive for homeowners."

Now I have heard a number of people comment on the potential impact of the end of the current tax credits, but quite frankly, I had not heard someone predict that it could mean a resurgence in layoffs.  Do you see that happening at your company if tax creditsexpire?  That's our poll question of the week.  And, of course, I'd like to hear from you.  How do you think the end of tax credits will impact the industry?  Will the impact be huge?  Will it be short-term or long-term?  Email me or post a comment below to share your thoughts.

Survey Results as of 11/09/2010:

Will the expiration of energy efficient tax credits translate into layoffs at your company?

Yes

  

 

76%

 

No

  

 

24%

 

Based on our survey results, it would seem the end of tax credits will have a large impact on many companies in our industry.  One dealer wrote:  "We are already making plans to lay off 20 percent of our workforce and that might not be enough. This will lead to more plant closings and add to the general malaise in the housing related industries. If the credit stays in place, we will actually add headcount."

David Walker, WDDA's VP, says he is sharing such stories with staff from the offices of Senators Snowe and Bingamon. With the focus on "jobs, jobs, jobs," they were asking WDDA to help them understand the impact of energy efficient tax credits for homeowners on the employment front, he notes.  The Senate aides will use the information as they push to include window legislation that might be voted on during the lame duck session of Congress that reconvenes next week.  The outlook, Walker suggests, is still very murky, particularly given the fact that larger issues, such as the Bush tax cuts, are likely to be at the center of much debate. 

Another dealer writes, "What the future holds is a mystery to me."  He think the stimulus tax credits have helped, and that his fourth quarter sales have definitely increased as a result of the pending conclusion of federal tax credit availability.  But his forecast for next year is not so dire. "I worry for the future, come what may, but feel like my company will continue to move forward with positive growth... It may just be at a slower rate."

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