Tax Incentives Could Stimulate Furniture Buying

During a recent trip to visit family and friends in my home state of Indiana, I was often asked how the furniture industry is faring during the recession.

My stock answer was “about as well as the auto industry.”

It was an analogy people in and around my hometown could understand, because the area has been devastated by the closings of numerous factories that produced auto parts. That, in turn, has put many restaurants, stores and other small businesses on the ropes.

I bring this up because that analogy also is a valid reason to support a U.S. House bill that would provide tax incentives to consumers and retailers who purchase home furnishings and building products.

Clearly, the auto industry is a much larger segment of the economy than home furnishings, but there’s no reason home furnishings isn’t just as deserving of a little government help. There’s no doubt that a boost in furniture sales would stimulate the economy and help a lot of small and large businesses.

What’s unique about this proposal, formally called the Home Improvements Revitalize the Economy (HIRE) Act, is that retailers as well as consumers would be eligible for the incentives.

Consumers could take a deduction of up to $2,000 or a tax credit of up to $500 (depending on income levels), and retailers would be eligible for a credit of up to $10,000 annually through 2011.

Kudos to the two Georgia congressmen who introduced the bill. At this point, I have no clue about its chances for becoming law, but it seems like an idea this very fragmented industry could support.