AUSTIN (National Real Estate Investor) – U.S. businesses are hoarding cash instead of helping revitalize the down economy through spending and hiring, says Dr. Mark Dotzour.
The Real Estate Center’s chief economist shared his thoughts on why at CCIM Central Texas’ symposium in Austin Tuesday.
“We are used to thinking of the federal government as the solution to these problems for economic growth and they have rapidly become the source of the problem because of the uncertainty that they have created for business people,” Dotzour said.
Take taxes, for instance.
Although proposals to raise the capital gains tax from the current 15 percent to 24 percent have been scaled back to 20 percent, Dotzour said even that hike would reduce initial returns on investments in commercial real estate. That threat of a bigger tax hit will influence many potential buyers to postpone acquisitions until a definite rate is set and can be factored into purchase prices.
Dotzour also said worries about higher income tax rates, increasing energy costs as a result of cap and trade legislation, and the potential impact of health-care reform proposals are weighing on the minds of business owners and would-be entrepreneurs.
For more on what Dotzour had to say, read the National Real Estate Investor article.