The federal tax reform plan released by House Republicans last week is irresponsible and unacceptable. It will increase homelessness and hardship. The proposed plan will eliminate a critical resource for developing and preserving affordable homes and will siphon savings from needed reforms to the mortgage interest deduction to pay for tax breaks for corporations and the wealthiest.
In a good, historic first step, the Republican bill would lower the amount of a mortgage on which the mortgage interest deduction (MID) could be claimed from $1 million to $500,000 for new homes and eliminate the availability of the deduction for second homes. These changes to the MID would impact fewer than 6% of mortgages throughout the country and would save an estimated $95.5 billion over the first decade.
Unfortunately, instead of using the savings from MID reform to invest in housing programs for those with the greatest needs, House Republicans funnel these and other savings to pay for highly regressive tax cuts for the richest households and corporations. Housing Action Illinois is a proud supporter of the United for Homes campaign, which proposes that MID reform savings be invested in affordable housing solutions for the lowest income people like the national Housing Trust Fund and a renter’s credit.
On top of this, over the next decade, the proposal would increase the deficit by at least $1.5 trillion, a move likely to lead to deep spending cuts to critical programs that we all rely on—including those for affordable housing and community development. As the National Low Income Housing Coalition notes, the congressional budget resolution that started the process for these tax cuts calls for $5.8 trillion in budget cuts over the next decade, including $800 billion of cuts from the non-defense discretionary side of the budget. Republicans may use future legislation and spending bills to make such budget cuts, using projected increased deficits to justify doing so.
Call your representative today and ask them to vote NO on the tax reform bill. Tell them that it will make problems such as the lack of affordable housing and homelessness worse, and this is an opportunity to invest in housing programs, not pass cuts that will increase homelessness and hardship.