On July 8, the Senate Committee on Finance released reports prepared by its five bipartisan working groups that were tasked with examining particular elements of the federal tax code. The reports, the release of which has been delayed since the end of May, were intended to provide policy recommendations to inform the Committee’s work as it tackles comprehensive tax reform. The Committee notes, that “[w]hile each report is a bipartisan product of each group’s Co-Chairs, unless otherwise stated, the materials presented are not necessarily endorsed, in whole or in part, by each member of each working group.” The reports appear to have fallen below the scope and detail originally expected.
In April, NLIHC submitted recommendations to two of the working groups. The recommendations sought to better align federal housing resources with the needs of extremely low income households who face a critical shortage of affordable rental units. NLIHC, on behalf of United for Homes campaign, sent the Individual Income Tax Bipartisan Working Group the campaign’s proposal to modify the mortgage interest deduction championed by United for Homes (see Memo, 4/20). NLIHC sent the Community Development and Infrastructure Bipartisan Tax Working Group a proposal to modify the Low Income Housing Tax Credit (LIHTC) program to allow for a third income targeting criterion (see Memo, 4/20). Neither report had housing related recommendations.
The Individual Income Tax Bipartisan Working Group’s report notes that when the working group began its examination of the tax code, it chose to focus on areas where it believed there was potential for bipartisan consensus: homeownership, charitable giving, higher education, and tax administration. However, after the working group completed a series of round table discussions, it appeared that members would not be able to reach an agreement on the issue of homeownership and dropped it from consideration.
The Community Development and Infrastructure Bipartisan Working Group’s report focused on the Highway Trust Fund, and did not address tax provisions affecting affordable housing. The report describes the LIHTC and the Housing Bond programs, but offers no policy recommendations.
In announcing the release of the reports, Senate Finance Committee Chair Orrin Hatch (R-UT) stated, “Any remake of the U.S. tax code, should work to lower the rates and broaden the base. We need to simplify the code and make it easier for families and create a system to keep American job-creators competitive around the globe. Now, armed with new ideas, I plan to work with Senator Wyden to review each working groups’ report and examine how they can be used to further advance the Committee’s efforts to achieve this bipartisan goal.”
The working groups’ reports are at http://www.finance.senate.gov/newsroom/chairman/release/?id=e9eefc66-7e11-4276-939f-3eca6fd6d959
The United for Homes’ comments on reforming the mortgage interest deduction are at http://nlihc.org/sites/default/files/NLIHC-Comments_Individual-Income-Tax-Reform-Working-Group.pdf
NLIHC’s comments on reforming the LIHTC program are at http://nlihc.org/sites/default/files/NLIHC-Comments_Community-Development-and-Infrastructure-Tax-Reform-Working-Group.pdf
More about United for Homes is at http://nlihc.org/unitedforhomes
More about the LIHTC program is at page 5-32 of NLIHC’s 2015 Advocates’ Guide, http://nlihc.org/sites/default/files/Sec5.10_LIHTC_2015.pdf