Be Careful What You Ask For

NOLA.com

NOLA.com

Tax Incentives Serve Working Families

As Congress debates reforming the tax code, they could make a big mistake.  By oversimplifying the tax code, Congress could throw the baby out with the bath water.

The Low Income Housing Tax Credit (LIHTC) and its sister credit the New Market Tax Credit (NMTC) could be deleted if Congress wipes out all “credits” when they revamp the tax code. If these programs are lost, not only would we lose programs that incentivize investment in distressed communities, the elimination of the “credits” would make almost impossible for local communities to build desperately needed affordable housing or to create economic growth in these communities.

Here are some facts:

  • An estimated 12 million renter/homeowner households pay more than 50% of their income for housing. (HUD)
  • In 2011, more than 50% (19.4 million) of rental households were rent-burdened – paying more than 30% of their income for housing. 25% of them were paying over 50%!

Though the federal budget issues are serious, we better be careful what we ask for. In the spirit of “everyone has to hurt some” working families might be hurt more than they can stand and distressed neighborhoods might have fewer options for new investment in affordable housing if Low Income Housing Tax Credit (LIHTC) and New Market Tax Credit (NMTC) incentives are eliminated.  These programs contribute to a healthier economy.

  • The LIHTC has created 95,000 new jobs and added $7.1 billion in income; generated roughly $2.8 billion in federal, state and local taxes! (NCSHA 2009 Fact Book)
  • Between 1987 and 2010 the LIHTC program has helped finance 36,364 projects and almost 2,235,000 housing units.
  • More than 72 percent of all NMTC investments are made in communities with severe economic distress -communities with unemployment rates more than 1.5 times the national average, poverty rates of 30 percent or more, or median incomes at or below 60 percent of the area median.
  • According to Treasury Department data, between 2003 and 2010, the NMTC generated over $20 billion in private investment in communities with high poverty rates, low incomes and high unemployment rates.
  • Between 2003 and 2010, NMTC investments generated well over 500,000 jobs in hard-hit urban and rural areas, including about 200,000 permanent jobs and 335,000 construction jobs.

These credits will only survive if Congress understands and believes how important they are to their constituents. Now is the time to let your voice be heard. Contact your Senators and Representatives now!  Use this link to find out how.