Enterprise Weighs in on Tax Reform as Process Accelerates
With health care reform hitting potentially insurmountable obstacles, Republicans in Congress are facing increased pressure to achieve a legislative victory on tax reform. This week the House took a significant step to advance the process by introducing a budget resolution for fiscal year 2018, which includes provisions that would allow Congress to pass tax reform legislation through the process of budget reconciliation – which requires only a simple majority in the Senate to proceed. While this would enable Republicans to enact tax reform without any Democratic votes, it would require near unanimity among Republicans, which may prove very difficult to attain for an issue as complicated as tax reform. At this time, we have only seen tax reform blueprints from the House and Administration and broad guiding principles from the Senate – with many differences between the three – so it may be many weeks or even months before consensus proposals emerge.
Despite this uncertainty, with pressure mounting and with tax reform discussions well underway it is a critical time for affordable housing and community development stakeholders to weigh in on protecting, strengthening and expanding the Low-Income Housing Tax Credit (Housing Credit) and New Markets Tax Credit (NMTC).
This week Enterprise weighed in with the Senate Finance Committee urging our support for the Housing Credit and NMTC in tax reform. Last month, Senate Finance Committee Chairman Orrin Hatch announced that he was requesting recommendations for creating a simpler and fairer tax system. In particular, he asked for recommendations regarding tax relief for middle-class households, strengthening business, removing impediments and disincentives for savings and investment, and updating the nation's international tax system.
In our comments to the committee, Enterprise thanked Chairman Hatch and Committee Member Senator Maria Cantwell for their leadership in championing legislation to expand and strengthen the Housing Credit, our nation’s primary tool for encouraging private investment in affordable rental housing. We strongly urged the Committee to advance the Affordable Housing Credit Improvement Act of 2017 (S. 548) this year, and to protect both the Housing Credit and multifamily Housing Bonds—a central component of the Housing Credit program—as part of any tax reform effort considered by Congress. We also urged the Senate Finance Committee to advance the New Markets Tax Credit Extension Act of 2017 (S. 384), introduced by Senator Roy Blunt and Senate Finance Committee Member Ben Cardin, to promote economic development in our nation’s most distressed communities.
The ACTION Campaign, which represents more than 2,000 affordable housing stakeholders, also submitted comments in response to Chairman Hatch’s request, focusing on the need to expand and strengthen the Housing Credit and to enact the Affordable Housing Credit Improvement Act.
While both the Affordable Housing Credit Improvement Act and the New Markets Tax Credit Extension Act have strong bipartisan support, with all tax expenditures at risk in tax reform it is important to continually reinforce the importance of the Housing Credit and NMTC as the tax reform process continues. For advocacy resources on the Housing Credit visit the ACTION Campaign website, and for advocacy resources on the NMTC visit the New Markets Tax Credit Coalition website.