On Thursday, November 2nd, House Ways and Means Committee Chairman Kevin Brady released the Tax Cuts and Jobs Act, a draft tax proposal which, if passed, would have a negative impact on community development and affordable housing. Read LOCUS President Jair Lynch’s official response to the proposal here. As written, the legislation would:
- Retain Low-Income Housing Tax Credits
- Eliminate Private Activity Bonds
- Eliminate Historic Tax Credits
- Eliminate New Markets Tax Credits
Other highlights include:
- Lowering the top corporate rate to 20% permanently.
- Phasing out solar, wind and other energy credits.
- Capping the mortgage interest deduction at $500,000 instead of $1.1 million.
- Preserving Section 1031-like kind exchanges for real estate.
- Establishing a top rate of 25% for pass-through businesses, such as partnerships and limited liability companies, on their business income.
- Limiting state and local tax deductions only to property tax and capped at $10,000 (Currently, state and local income and sales taxes can also be deducted).
Click here to access LOCUS’s House Tax Reform Analysis.
The House Ways and Means Committee is expected to mark-up the legislation on Monday, November 6, 2017, while the Senate is also expected to release their draft proposal this week week.
Congress needs to hear from you! Now is the time to tell them to:
- Preserve Historic and New Markets Tax Credits.
- Adjust Community Development Tax Incentives to accelerate private investment in affordable housing, public infrastructure and economic development.
- Preserve the tax exemption on multifamily Housing Bonds. Without these bonds, Housing Credit development could be reduced by more than 50% 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.
Smart Growth America and LOCUS are members of the ACTION (A Call to Invest in Our Neighborhoods) Campaign, a coalition of more than 2,150 businesses and organizations fighting to prevent tax reform from devastating affordable housing production. Join ACTION today!
Click here to learn more about Smart Growth America’s position on tax reform.
(Photo: Mark Fischer via Flickr)