On November 2, the House Ways and Means Committee proposed a tax reform bill known as the “Tax Cuts and Jobs Act”. The bill was introduced by the House of Representatives, and will be voted on in the upcoming weeks. House Speaker Paul Ryan has indicated that the bill is primarily a middle-class tax cut, as it will offer a larger tax break to help “most Americans.” The bill will lower the number of tax brackets from seven to four along with decreasing the corporate tax rate to 20%.
Unfortunately if passed, this bill will completely eliminate the private activity tax exempt bond (PAB) program, which is a major driver of Low Income Housing Tax Credits (LITHC). The elimination of the PAB program, which helps to finance many 4% tax credit developments, will have immediate negative consequences for the development of affordable housing across the U.S. In addition, PAB’s have historically been used to fund infrastructure projects on a state and regional level, which stimulates economic activity by investing billions of dollars back into the economy.
If you are interested in speaking against this proposed bill, please communication with the Ways and Means Committee Chairman Kevin Brady (R-TX) and Ranking Member Richard Neal (D-MA) in the House and Senators Orin Hatch (Chair) and Maria Cantwell (Ranking Member) of the Senate Finance Committee.
A section by section analysis of the proposed bill can be found here.