Joint tax reform plan preserves the Housing Credit
This week, the Trump Administration and Republican Congressional leadership released their tax overhaul framework, “Unified Framework for Fixing our Broken Tax Code,” which proposes broad tax cuts, simplified taxation tiers, profit and workforce repatriation, and economic growth. The Low-Income Housing Tax Credit (LIHTC) was one of a few tax provisions to be explicitly retained in the framework. Responding to strong pressure from NAHMA and our industry colleagues, the plan eases industry concerns over the elimination of LIHTC, but leaves questions unanswered regarding private activity bonds and other business and individual tax provisions.
The joint effort by the “Big Six” – which includes Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn, as well as the top House and Senate leaders and the Chairmen of the two tax-writing committees – proposes the elimination of most tax credits and itemized deductions in favor of lower rates overall. Under the proposal, itemized deductions would be replaced with a higher standard deduction, and the seven current income tax brackets would be consolidated into three broad brackets. The plan also proposes to keep retirement-, work-, and education-related tax incentives, but leaves the details up to Congress. On the business side, the plan calls for lower small business (25%) and corporate (20%) tax rates, higher than the 15% rate originally proposed by the Trump Administration; the framework also calls for eliminating the estate tax, ending incentives for offshore tax havens, and allowing for immediate business expensing.
With crucial details of the plan still pending, the nine-page proposal was met with reserved responses in Congress and across the country. Congressional leaders are expected to draft legislation for the tax reform proposal beginning with the annual budget reconciliation process. The Senate’s newly-released budget resolution will likely serve as a legislative vehicle for the tax reform process. Committee proceedings for the Senate’s budget resolution begin early as next week.
NAHMA members will continue to conduct outreach to lawmakers to highlight the importance of preserving and strengthening LIHTC. We encourage you to help us in this advocacy effort during the October meeting. Please let NAHMA staff know by Thursday, October 5
th, if you would like to join in the congressional visits to advocate on behalf of affordable housing programs.
Congress pivots toward self-sufficiency efforts in subsidized housing
This week, the House Financial Services Subcommittee on Housing and Insurance held a hearing,
“Overview of the Family Self-Sufficiency Program”, to examine the impacts and future outlooks for the Family Self-Sufficiency program, a HUD program that assists families in leveraging increased earnings to build self-sufficiency. The hearing comes on the heels of Senate bipartisan legislation (
S.1344) introduced by Senators Roy Blunt (R-MO) and Jack Reed (D-RI) on the 25th anniversary of the program. During the hearing, Ranking Member Emanuel Cleaver (D-MO) announced his intention to introduce companion House legislation to mirror the Senate bill, which aims to streamline the program and expand participation to tenants in Project-based Rental Assistance.
“Today’s subcommittee [hearing] on the Family Self-Sufficiency Program was essential in learning what needs to be done to achieve our goal of helping families both increase their employability and become less dependent on government assistance,” said Subcommittee Chairman Sean Duffy (R-WI).
The hearing had an overall positive tone, with hearing witnesses largely in agreement about the program’s potential and the need for more federal funding. Testifying at the hearing were Aaron Gornstein, President and CEO, Preservation of Affordable Housing; Jeffrey Lubell, Director of Housing and Community Initiatives, Abt Associates; Stacy L. Spann, Executive Director, Housing Opportunities Commission of Montgomery County; Kristin Siglin, Senior Vice President, Policy, Housing Partnership Network; and Sherry Riva, Executive Director, Compass Working Capital.
“A systematic and thoughtful expansion of FSS could bring these households into the economic mainstream and free up scarce rental housing for families that are not currently served,” said Ms. Siglin, of the Housing Partnership Network. Mr. Lubell, of Abt Associates, cautioned against expanding the program without also expanding the funding accordingly, saying the effect could be to “dilute” the program’s impact, rather than to strengthen it.
NAHMA is currently working with its committee structure to formulate a position on the FSS legislation.
