The House Ways and Means Committee approved the Republican tax reform bill, the “Tax Cuts and Jobs Act” (HR 1), by party-line vote of 24-16 on November 9, after four days of marathon debate. The House will likely vote on passing the bill later this week. NLIHC has significant concerns with the tax bill and is calling on advocates to engage their representatives to defeat the bill. We will continue to work with our members and partners to ensure that tax reform efforts do not enrich corporations and wealthy Americans at the expense of people with the lowest incomes.
The legislation is estimated to increase the national debt by $1.5 trillion over a decade. Increasing the debt in this way will likely lead to deep spending cuts in the future to important domestic programs, including affordable housing and community development programs.
The House bill takes a historic step in directly revising the mortgage interest deduction (MID), a $70 billion annual tax expenditure that primarily benefits higher income households, including the top 1% of earners in the country, but the legislation does not reinvest the savings from such reforms into affordable housing solutions for those most in need. The bill instead gives massive tax cuts to wealthy individuals and corporations. Representative Earl Blumenauer (D-OR) directly criticized the bill for doing little to redirect the savings from MID reform to low and moderate income homeowners and renters.
While proposal preserves the Low Income Housing Tax Credit (Housing Credit) program, it eliminates the tax exemption for private activity bonds which are critical to the production and preservation of affordable housing through the 4% Housing Credit. The bill also eliminates the New Market Tax Credit program.
During the debate, Representative Suzan DelBene (D-WA) offered an amendment that would increase the allocation of Housing Credits by 50%. The proposed amendment also included retaining the exemption for private activity bonds, which helps the private sector finance projects with public benefit, including housing. She stated that “the Republican tax reform plan would worsen the state of affordable housing” and said the lack of expansion of the Housing Credit was a “missed opportunity.” Representative Pat Tiberi (R-OH), who has introduced a bill to improve the Housing Credit so that it could better serve lower income households, also expressed disappointment that the tax bill did not expand the Housing Credit. Mr. Tiberi did not, however, support the amendment, noting abuses of private activity bonds that needed to be addressed. Ultimately, the amendment failed in a 16-24 vote along party lines.
Representative Joseph Crowley (D-NY) offered an amendment that would provide a renters’ tax credit for those paying more than 30% of their incomes on rent. Representative Crowley has introduced similar legislation, the “Rent Relief Act of 2017” (HR 3670). The amendment also included a credit valued at $8,000 for first-time homebuyers. Mr. Crowley said that “Congress can and must address this harmful trend” of rapidly increasing rents and decreasing affordable housing stock. Representative Terri Sewell (D-AL) offered her support of the amendment, saying that decreasing rent burdens and increasing homeownership rates would help address income inequality. Representative Tom Rice (R-SC) argued against the amendment, calling it “another entitlement” when taxpayers prefer “another opportunity.” The amendment failed in a 16-24 vote along party lines.
Learn more about the House bill at: http://bit.ly/2iXT6hS