NLIHC’s United for Homes campaign released a new report outlining how the Trump administration and Congress can use tax reform to help end homelessness and housing poverty in the U.S. by reforming the mortgage interest deduction (MID) – a $70 billion tax expenditure that primarily benefits higher income households – and reinvesting the significant savings into rental homes for people with the greatest needs.
The report shows that tax reform legislation could reprioritize federal housing policy to address the severe shortage of affordable rental homes for extremely low income people, benefit 25 million low and moderate income homeowners, and boost economic prosperity and job creation. Three out of four households eligible for housing assistance are turned away due to a lack of funding. At the same time, three-fourths of the $200 billion spent each year by the federal government to help Americans buy and rent their homes goes to higher income households through the MID and other tax benefits. With smart, modest reforms to the MID, Congress can make the deeply targeted investments in affordable rental homes that our nation needs for the economy, local communities, and families to thrive – all without increasing costs to the federal government.
The report also analyzes the Trump administration’s proposal to double the standard tax deduction. While this would provide a greater tax break to low and moderate income households, it would make the MID even more regressive, benefitting only the highest income homeowners with the largest mortgages. The report recommends pairing any proposal to double the standard deduction with reforms to the MID and reinvesting the savings into affordable rental housing solutions for those with the lowest incomes.
Read the report “Reforming the Mortgage Interest Deduction: How Tax Reform Can Help End Homelessness and Housing Poverty” at: http://bit.ly/2vkfWEq