Raising Revenue Through Reform Could
Provide Affordable Housing Resources
On April 15, 2015, the National Low Income Housing Coalition (NLIHC), on behalf of the United for Homes campaign, submitted comments to the Individual Income Tax Working Group of the Senate Committee on Finance.
The comments called for modification of the mortgage interest deduction (MID) in order to fund the National Housing Trust Fund (NHTF).
The comments to the Individual Income Tax Working Group focused on the United for Homes campaign proposal to fund the NHTF with revenue raised through modifications to the mortgage interest deduction.
- Cap the amount of interest a household could claim as a tax benefit at $500,000, down from $1 million plus $100,000 in home equity loans and
- Convert the current deduction to a 15% nonrefundable credit.
The conversion to a credit makes the mortgage interest tax break available to a larger and less wealthy home owning population than receives it now. Based on an analysis by the Tax Policy Center commissioned by NLIHC, the number of homeowners to get a tax break would expand from 39 million to 55 million, and 99% of that increase would be taxpayers with annual income of $100,000 or less.
The analysis by the Tax Policy Center shows that these two changes, phased-in over five years, would raise $230 billion in revenue over ten years. NLIHC proposes that this new revenue be directed to the NHTF.
“We readily acknowledge proposing to fund a federal trust fund by raising revenue through reform of a federal tax expenditure is unorthodox. But it is the kind of creative, out-of-the box thinking that is required in this era of diminishing resources for low income housing programs.”
NLIHC President and CEO Sheila Crowley said.
Ms. Crowley included the list of the more than 2,000 endorsers of the United for Homes campaign in the comments. Monarch Housing Associates is a proud endorser of United for Homes.
Click here for United for Homes’ comments to the Individual Income Tax Working Group.
Click here for more from NLIHC.