Economic Recovery Now! That Is What We Are Talking About!
Economic Recovery Now! That is what we are talking about!
The huge question is how? In order to determine how I have to ask you a few questions. First, what is it that leads us into and out of every recession in history? Real estate. What do many economists estimate is 75% of our nation's net worth? Real estate! How do we create economic recovery? Create jobs. Who is the number one employer by far in every economic recovery? Small business! Who are we hurting the most when we abide by the "tax and spend mentality" as it relates to economic recovery? Small business! Who is the number one owner of commercial real estate in America? Small business! What is happening to commercial real estate across the Great Nation? It's value is dropping dramatically due to lack of financing, lack of demand and huge uncertainty! If you are a small business owner and you are losing your commercial real estate to your lender or you are upside down and you are just trying to survive right now, are you thinking about how to hire more workers and thus create more jobs? No! If you are a small business owner and you are not getting anywhere financially and every time you turn around you have to pay more taxes and fund a huge program like Obamacare, are you thinking about starting a new business or expanding your current business? No! So, what do we need to do now in order to help small business prosper and begin to think about expanding? How do we encourage small business to expand and thus create more jobs? We need to start where small business needs it the most, we need to create demand for commercial real estate now!
How do we create demand for commercial real estate now? We use history as our guide! In 1981, The Reagan Administration and the United States Congress passed a bill known as "The Economic Recovery Tax Act of 1981" The key features were the lowering of the capital gains tax rate and the inclusion in the tax code of Accelerated Cost Recovery System or ACRS for commercial residential and non-residential real estate. In essence what this legislation did is it created instant demand for our commercial real estate because an investor had to buy commercial real estate to take advantage of the new accelerated depreciation schedule that allowed an owner of commercial real estate the option of taking all of the depreciation of the improvements on the property within the first seven years of ownership. This created a huge tax shelter for these owners and created instant demand for the commercial real estate in this country. The tax shelter put money back in the pockets of the small business owners and investors, created demand, thus confidence in commercial real estate again! It also freed up capital for reinvestment that created businesses that created jobs that created the single greatest period of economic expansion our nation has ever experienced! Ever!
In 1986, the United States Congress passed the tax reform act of 1986 that eliminated retroactively ACRS and made every master appraisal (of commercial real estate) null and void instantly!
Since 1986, we have not experienced expansion of our economy like that from 1981 to 1986 since. Yes, there have been tax cuts, but ACRS has not been a part of it. Ask yourself, when was the last great expansion of our economy that was not fueled by subprime home loans and rating agencies that at best were not accurate? When? We have had modest economic growth thanks to an activist Fed that has kept rates very low for a very long time. Nothing like 1981 to 1986 though, nothing!
This is the Greatest Nation on this planet and it is time we start acting like it!
If you want real economic recovery now, send this to everyone you know and demand from your elected officials in Washington D.C. that they implement this now! We have history on our side we should use it!
Thank you for your time!
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