Action Alert: Tax Reform Proposal
There’s no time to lose as Republican members of Congress are moving quickly to advance a draft tax reform bill, the “Tax Cuts and Jobs Act,”and several proposed changes to current tax law would negatively impact SCANPH members by reducing housing production and preservation. Action is needed to ensure legislators understand the devastating impact of several provisions of the bill.
Bill Overview:
- Lower the top corporate tax rate from 35 percent to 20 percent, effective January 1, 2018, and eliminate dozens of tax expenditures in order to achieve the lower rate.
- Retain the Low-Income Housing Tax Credit with no proposed changes. None of the broadly-supported provisions from the Affordable Housing Credit Improvement Act (H.R. 1661) were included.
- Eliminate the tax exemption on private activity bonds, including multifamily Housing Bonds.
- Eliminate New Markets Tax Credit (NMTC) allocation authority after 2017. The NMTC is currently authorized through 2019, meaning this legislation would rescind two years of allocation authority that had already been made available.
- Repeal the historic rehabilitation credit beginning in 2018.
- Phase out solar, wind and numerous other energy credits.
Next Steps:
More background information here.
- Monday, November 6: The Ways and Means committee will review the bill. Committee Chairman Kevin Brady (R-TX) is set to release his "Chairman's mark," which will reflect additional changes to the initial bill, and reportedly amendments can be offered during the markup.
- Senate Finance Committee could release their proposal as soon as next week
Take Action:
Reach out to your representatives! Talking points below:
Find additional messaging from the ACTION campaign. Find your representative here.
- Preserve the tax exemption on multifamily Housing Bonds. Without Housing Bonds, Housing Credit development could be reduced by as much or more than 50 percent annually.
- Make adjustments to offset the impact of a lower corporate rate on Housing Credit investment to ensure that the amount of Housing Credit equity per development is not substantially decreased. More detailed proposals on the adjustments needed are forthcoming, but in the meantime we encourage advocates to simply convey the message that modifications will be needed.
- Include the provisions to strengthen the Housing Credit from the Tiberi-Neal Affordable Housing Credit Improvement Act (H.R. 1661). This legislation has overwhelming bipartisan support and would make significant strides towards making the program more streamlined and flexible, many of which are low- or no-cost.
- Retain the New Markets Tax Credit (NMTC) and the Historic Tax Credit (HTC), because they are essential tools for attracting private investment to communities that need it.