Congressman Tom MacArthur Votes Yes on Tax Reform that Preserves Housing Credit while eliminating New Market Tax Credits and Private Activity Bonds
On November 16, 2017, the House approved the Republican tax reform bill, the “Tax Cuts and Jobs Act” (HR 1) by a vote of 227-205.
Congressman Tom MacArthur voted in favor of the tax reform bill. The other eleven members of NJ’s congressional delegation voted no.
The National Low Income Housing Coalition (NLIHC) as well as Monarch Housing have significant concerns with the tax bill and calls on advocates to engage their representatives to defeat the bill. We will continue to work the NLIHC and its members and partners to ensure that tax reform efforts do not enrich corporations and wealthy Americans at the expense of people with the lowest incomes.
The House bill takes a historic step in directly revising the mortgage interest deduction (MID), a $70 billion annual tax expenditure that primarily benefits higher income households, including the top 1% of earners in the country.
But the legislation does not reinvest the savings from such reforms into affordable housing solutions for those most in need. The bill instead gives massive tax cuts to wealthy individuals and corporations.
The proposal preserves the Low-Income Housing Tax Credit (Housing Credit) program.
The proposal eliminates the tax exemption for private activity bonds which are critical to the production and preservation of affordable housing through the 4% Housing Credit.
The bill also eliminates the New Market Tax Credit program.
During the debate, Representative Suzan DelBene (D-WA) offered an amendment that would increase the allocation of Housing Credits by 50%. The proposed amendment also included retaining the exemption for private activity bonds, which helps the private sector finance projects with public benefit, including housing.
She stated that “the Republican tax reform plan would worsen the state of affordable housing” and said the lack of expansion of the Housing Credit was a “missed opportunity.”
Representative Pat Tiberi (R-OH), who has introduced a bill to improve the Housing Credit so that it could better serve lower income households, also expressed disappointment that the tax bill did not expand the Housing Credit.
Mr. Tiberi did not, however, support the amendment, noting abuses of private activity bonds that needed to be addressed. Ultimately, the amendment failed in a 16-24 vote along party lines.