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With Tax Reform in Sight, Threat to Housing Credit Looms Large
Emily Cadik, Peter Lawrence / AFFORDABLE HOUSING FINANCE / May 16, 2013
The rallying cry for tax reform goes something like this: We need a simple, straightforward tax code—no more expensive tax software, no more tax accountants, no more hours of complicated calculations—and a code that helps to lower taxes on the average person and business.
But on the other side of this appealing vision is a threat to programs built into the tax code that have major impacts on people and the communities in which they live—and those programs could disappear overnight. The low-income housing tax credit (LIHTC) has enjoyed bipartisan support over its 26-year history, but determination to eliminate credits and deductions and bring down corporate rates could put even successful, popular credits like this one at risk.
Laying the foundation for tax reform
Congress has spent the last several months reviewing the tax code in preparation for tearing it apart and writing a new one. In early May, the House Ways and Means Committee’s tax reform working groups released a summary of their findings from reviewing their respective portions of the tax code and soliciting stakeholder feedback. The Senate also continues its systematic review of the tax code in a series of weekly internal discussions.
Hearings on tax reform are ongoing in both the House and the Senate. In late April, the House Ways and Means Committee held a hearing on tax reform and residential real estate. Bob Moss, senior vice president of Boston Capital and chairman of the Housing Advisory Group, testified on behalf of the A.C.T.I.O.N. (A Call To Invest in Our Neighborhoods) Campaign—a grassroots coalition of more than 450 national, state, and local organizations dedicated to preserving and strengthening the LIHTC.