The debate over comprehensive tax reform and the implications of such reform on the tax credit program have been a long simmering issue in the affordable housing community. A flurry of reports on debt reduction over the past year and the debt-ceiling debate that followed have contributed to a fiscal and political environment that put many in the industry on watch. So, with all of the attention this issue has been getting, what are the odds the low income housing tax credit is in any real danger from super-committee action? According to several industry experts, the answer appears to be low.
For starters, one of the committee’s co-chairs, Patty Murray (D – WA) is a staunch ally of affordable housing causes. “Patty Murray is very supportive of housing”, said Colleen Fisher, Executive Director of the Council on Affordable and Rural Housing. “John Kerry also has a very good track record… in general, amongst all members of the committee, there appears to be support on the tax credit side of things”.
Peter Lawrence, Senior Director of Public Policy & Government Affairs for Enterprise Community Partners, echoed Colleen’s sentiments, “Patty Murray has been a long standing champion of affordable housing and huge advocate for housing and community development.” He also mentioned Senator Kerry (D – MA) and Representative van Holland (D –MD) and Baccera (D – CA) as allies of the affordable housing cause.
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Part I in a series that will examine the congressional super committee and the Low Income Housing Tax Credit program
At several points during the debate over raising the debt ceiling, Washington appeared to be headed towards a “grand compromise”. Such a deal would have mixed broad ranging cuts, including cuts to entitlement programs, with revenue-increasing tax reform. While tax reform is certainly not a novel policy proposal, it is one that has gained traction in recent months as politicians and policy-wonks alike have searched for solutions to the country’s mounting debt-crisis. It is also a policy proposal that has drawn the attention of the affordable housing industry, as industry advocates fret over the future of the Low Income Housing Tax Credit in a world without tax-loopholes. The debt-deal that eventually emerged could hardly be labeled grand, but the possibility for a “grand bargain” including tax-reform remains alive, with responsibility for a deal shifted to the so-called “super committee”.
The call for tax-reform has been mounting for months. In November of 2010, the Bipartisan Policy Center’s Debt Reduction Task Force released a report that suggested, “An end to almost all tax expenditures to offset the costs of the much lower tax rates”. The President’s Economics Recovery Advisory Board released a report in August 2010 which called for, “Eliminating specific expenditures [to] improve efficiency while simplifying the tax code”, and perhaps most notable of the slew of reports, The National Commission on Fiscal Responsibility and Reform (more commonly referred to as the Bowles-Simpson report) called for a comprehensive tax reform that would, “Sharply reduce rates, broaden the base, simplify the tax code, and reduce the deficit by reducing the many ‘tax expenditures’—another name for spending through the tax code.” [click to continue…]