More Bad News About The Tax “Reform” Bill

I have a feeling I should keep the title of this post for repeated future use.

It’s hard to know which of the damaging provisions of the tax bill were intentional, and which were the result of the unseemly haste and secrecy that marked its passage. As I have previously noted, scholars of philanthropy have predicted that it will cause a significant decline in charitable giving. (And yes, it would be nice if people gave money because they simply felt generous, but in the real world, deductibility that makes the gift less costly to the giver is a pretty important factor.)

Now we have reports that the tax bill will dramatically reduce the production of (much needed) low-income housing and the preservation of historic structures.

According to the New York Times

SAN FRANCISCO — The last time that Congress approved a sweeping overhaul of the federal tax code, in 1986, it created a tax credit meant to encourage the private sector to invest in affordable housing. It has grown into a $9 billion-a-year social program that has funded the construction of some three million apartments for low-income residents.

But the Republican tax plan approved last month amounts to a vast cutback, making it much less likely that such construction will continue apace. Because the tax rate for corporations has been lowered, the value of the credits — which corporations get in return for their investments — is also lower.

“It’s the greatest shock to the affordable-housing system since the Great Recession,” said Michael Novogradac, managing partner of Novogradac & Company, a national accounting firm based in San Francisco.

According to an analysis by his firm, the new tax law will reduce the growth of subsidized affordable housing by 235,000 units over the next decade, compounding an existing shortage.

Then there’s a report from Shelterforce about the effect of the tax bill on a Chicago neighborhood revitalization project and other projects like it.

Urban and rural communities throughout the country have historic buildings that can be preserved and repurposed for multiple community needs. 

In addition to revitalizing communities such as Uptown and spurring local economic growth, the HTC returns more to the U.S. Treasury than it takes. According to a study commissioned by the National Park Service, since inception, $25.2 billion in federal tax credits have generated more than $29.8 billion in federal tax revenue from historic rehabilitation projects. The credit generates new economic activity by leveraging private dollars that not only preserve historic buildings but also create jobs; through 2016, the rehabilitation of 42,293 historic buildings has created more than 2.4 million jobs, according to the Historic Tax Credit Coalition.

Though HTCs were preserved in the tax bill passed by Congress, its value was diminished. Instead of allowing investors to take the full value of the credit when a building opens, as they can now, it parcels out the credit over five years. Historic preservationists fear this change will decrease the attractiveness of the credit and consequently negatively impact its pricing. A project seeking $2 million of Historic Tax Credit investments could lose as much as $400,000 in valuable capital. Historic rehabilitation projects frequently have higher costs, greater design challenges, and weaker market locations—all of which can already cause lender and investor bias against such investments.

Another casualty of tax reform is the demise of tax credit bonds. While Private Activity Bonds survived the final assault, new key tools such as Qualified Energy Conservation Bonds (QECB) did not.

Yessir. Some tax “reform.”

 

 

13 thoughts on “More Bad News About The Tax “Reform” Bill

  1. Class warfare is real and the left currently has no answers because they were blind-sided still thinking their once almighty democratic party was the answer. It’s not. The d-party has done nothing to stop the decimation of unions in both the public and private sectors. They’ve offered no resistance to the destruction of public schools. And now, all dissident voices are being censored by Google, Facebook, and Twitter. Soon, the ISPs will be censoring dissident voices when they have full control over internet access.

    But hey, Hollywood is making a comeback and there are new TV series worth watching…

  2. Today’s blog is one that should interest all of us in its entirety; for many reasons and on many levels. I am not bragging, could never give an amount worthy of bragging about but, I had no thought of claiming any donation I gave as a tax deduction. My reasons for giving were the issues addressed by the organization. Having said that; some issues in the blog today work directly (in my mind) into an issue I have been seeking help for and apparently there is no government division or private organization interested in RELOCATION ASSISTANCE FOR SENIORS, DISABLED AND LOW-INCOME RESIDENTS IN AREAS OF GENTRIFICATION!!!

    “Now we have reports that the tax bill will dramatically reduce the production of (much needed) low-income housing and the preservation of historic structures.”

    “Urban and rural communities throughout the country have historic buildings that can be preserved and repurposed for multiple community needs.”

    Cities, businesses involved in the gentrification, the neighborhood organizations, including churches, and the local tax base are all interested in how this will benefit them – financially. No thought is given to the dispossessed residents who are the very ones who spent their working years paying into the tax base and voting for the Democrats or Republicans who benefited by their vote…for decades. Their children and grandchildren, and in some cases their great-grandchildren today are still the source of tax dollars supporting those in office who are making the decisions as to which developers will receive tax breaks, tax abatements and benefit from the many tax loopholes as well as Trump’s new “Tax Reform”.

    “Another casualty of tax reform is the demise of tax credit bonds. While Private Activity Bonds survived the final assault, new key tools such as Qualified Energy Conservation Bonds (QECB) did not.”

    This last copied and pasted portion of today’s blog will, as intended by Trump, et al, benefit those with money while those facing eviction who helped to build cities and neighborhoods are simply trying to find a way to find an affordable home as they struggle to afford food and medical care. How many of them have become homeless in Indianapolis alone in gentrified areas?

    Currently there is a large housing facility at 222 South Downy Avenue filled with senior, disabled, low-income residents facing a future of eviction with no help from the government they have supported for many decades. The new owner, an out-of-state developer was stopped for one year due to zoning requirements from evicting all residents, so they raised rents by $125 per month on many of the senior, disabled, low income residents who are facing a bleak future. I have run out of government officials to contact asking for help for these people, some are my family. I also contacted the original owners and for years occupants of 222 South Downy Avenue; Disciples of Christ, Christian Church Mission Foundation. They sold the building to developers who provided a secure, well maintained living facility for senior, disabled and low-income people. That “Christian” church didn’t even respond with acknowledgement of receiving my letter.

    Are the current senior, disabled, low-income residents of this home site and all others being ignored to enrich the already rich, benefiting from Trump’s “Tax Reform” who will force them out of their homes with nowhere to go? We know the answer to my questions is…YES! They are no longer of use to local government or the economy supporting the businesses benefiting from Trump’s “Tax Reform”.

  3. “According to an analysis by his firm, the new tax law will reduce the growth of subsidized affordable housing by 235,000 units over the next decade, compounding an existing shortage.”

    The rapidly rising income gap will cause a greater need for subsidized housing. I guess the corporate powers believe that those who work for less than a livable wage can just live on the streets.

    Living the American dream, aren’t they?

  4. It will be months before we understand all of the damage the “Tax Reform” has done to our society. I wonder how long it will take the Senate to return to “Regular Order?” I’m betting it won’t happen until Mitch is gone.

  5. Perhaps by now some of those Republicans who voted for the “tax bill” have begun to read it and see just what their votes have wrought. It was a tax cut bill for the rich pure and simple with a few other items thrown in to garner support of pro-lifers et al. Borrowing from our grandchildren to pay off the rich and corporate class today is perhaps the worst part of this law, adding as it does to the cancer of debt on the backs of unrepresented kids, some of whom have not yet been born, speaking of taxation without representation. It was a trickle up bill, a gift to the rich and corporate class to be paid for by the rest of us and our posterity. When and if we have a Democratic president and Congress in 2020 and an opportunity to undo the damage done by Trump and his greedhogs in the Congress, I would recommend that repeal of this law be among the first for consideration in order to stop even further damage.

  6. What needs to be pointed out is the tax credits for affordable housing and historic structures were also a huge subsidy for developers and builders. Many got rich quick. I support, as much as any of you do, affordable housing and preservation and restoration of historic structures. We just don’t need a tax credit scheme to do it that enriches the enriched. It should be a direct investment by government as essential infrastructure is the only point I am making here, not lauding any provision of the tax “reform” legislation.

  7. I agree that when you don’t hold hearings this is what you get, but I disagree that little thought went into this bill. I think there are clear themes in what was cut or diminished and what was kept. The themes? For super-rich people and the inequitable status quo and against the wonderful efforts to revitalize cities, conserve energy, use new energy sources and help people who are disabled, poor, ill or in need of any kind of assistance. There. May be more, but you get the picture. Sadly, I confess I picture the person/people who completed the draft of this monstrous bill drooling in delight over the draft of it. I am disgusted by the Congressional “process” that puts brinksmanship over governing and allows such things to happen. Of course, they do it because it works. For them. Not for the nation. Not for We the People.

  8. We in America are really only beginning to notice the rest of the world not like us. There is America and Europe where many of us came from and we like to vacation in and there are, uh, let’s say “messy” countries where people smell and eat strange stuff and suffer from a shortage of clean toilets. Eeeeewwww.

    Not that every one in “messy” countries is poor. Some are fabulously wealthy having to work hard at getting rid of money just to keep up.

    The question is will the Republicans succeed in devolving America into the “messy” country of their dreams where the rich are properly rich and the poor properly poor?

    I read here some days that the Democratic Party is no longer good enough for America. I’m pretty sure that I can’t support Republican dreams of a “messy” America. So, what to do?

    I’ve been around long enough to frankly have given up on perfection. Nice to dream of but people just aren’t there yet. We keep building things that fall well short of perfection and constantly need upgrading just to chase good.

    So to help my grandchildren (also not perfect BTW) avoid living in a messy country, their and my worst nightmare, I’m going to be an also imperfect anti-Republican for a couple of years. Perhaps that’s the best I can do.

  9. A distinguishing characteristic between teenagers and adults is the appreciation of consequences for one’s actions.

    A distinguishing characteristic of good students throughout life is their intellectual curiosity and persistence to pursue knowledge to the point of comprehension.

    While Donald Trump has never become an adult or a good student, he apparently has caused adults in Congress to regress to his teenage state. So sad and scary and a call to action to elect those who will be the intellectually curious adults in the room once again.

  10. The mistake made would be in presuming the Tax Reform Plan was not well thought out. It was thought out alright but, the contributors to the plan have a profound indifference to anyone who is not a part of the elite 1%.

    As Chris Hedges writes in his column The Useful Idiocy of Donald Trump. https://www.commondreams.org/views/2018/01/29/useful-idiocy-donald-trump
    ================================
    Trump, who has no inclination or ability to govern, has handed the machinery of government over to the bankers, corporate executives, right-wing think tanks, intelligence chiefs and generals. Trump provides the daily entertainment; the elites handle the business of looting, exploiting and destroying.

    The elites’ moral and intellectual vacuum produced Trump. They too are con artists. They are slicker than he at selling the lies and more adept at disguising their greed through absurd ideologies such as neoliberalism and globalization, but they belong to the same criminal class and share many of the pathologies that characterize Trump.

    The elites in dying cultures turn everything into a commodity. Human beings are commodities. The natural world is a commodity. Government and democratic institutions are commodities. All are mined and wrecked for profit. >> Side Bar >> Among the commodities is Health Care. ACA was simply a subsidy for the Insurance Agency.

    They denigrate empathy, intellectual curiosity, artistic expression and the common good, virtues that sustain life. They celebrate a hyper-individualism embodied in celebrity, wealth, hedonism, manipulation and the ability to dominate others.

    As long as Trump serves the interests of the elites he will remain president. If, for some reason, he is unable to serve these interests he will disappear. He (Trump) is useful to those who hold real power in the corporate state, however much they would like to domesticate him.

    Trump’s bizarre ramblings and behavior also serve a useful purpose. They are a colorful diversion from the razing of democratic institutions. As cable news networks feed us stories of his trysts with a porn actress and outlandish tweets, the real work of the elites is being carried out largely away from public view.

    The press, along with political and intellectual elites, spent decades championing economic and political policies that solidified corporate power and betrayed and impoverished American workers. The hypocrisy and mendacity of the elites left them despised and distrusted by the victims of deindustrialization and austerity programs.
    ====================================================================

    Meanwhile the Corporate Democratic Establishment is hoping Robert Mueller will perform the heavy lifting. It is laughable to hear all this outrage about Russian interference in our election. Ignored by the McMega-Media is the enormous influence the 1% have on our elections in the form of campaign donations.

  11. I am surprised at the low response to this blog; unless the references to needed help with low-income housing and maintaining historical buildings for reuse struck a nerve and there is more support for Trump’s “Tax Reform” than we thought. My rant asking for relocation assistance for those seniors, disabled with low-income who are losing their homes due to gentrification is too close to increasing the homeless numbers everywhere. Too many people want to avoid acknowledging the homeless; that has been the general attitude for decades. Maybe building new condos is more important than revitalizing older neighborhoods or saving and using historical buildings. Star journalist Brian Eason didn’t get much response to his series, “Abandon Indy” regarding the tax law preventing purchase of the abandoned properties to provide responsible ownership who want to repair, renovate and reuse. Personally; I am disappointed…but then I do live in an older home in an older neighborhood where we struggle financially and invest sweat equity to maintain the status quo. Just sayin’

Comments are closed.