|House Republicans Unveil Tax Reform Blueprint|
|On June 24, the House Republican Tax Reform Task Force, chaired by House Ways and Means Committee Chairman Kevin Brady (R-TX), released its blueprint for tax reform, A Better Way: A Pro-Growth Tax Code for All Americans. The blueprint is silent on both the Low Income Housing Tax Credit and tax-exempt bonds, including Housing Bonds, but declares that it would "generally eliminate special-interest deductions and credits in favor of providing lower tax rates for all businesses and eliminating taxes on business investment." The only business credit the blueprint specifically calls for is a credit to encourage research and development (R&D) that is similar to the current R&D credit.
According to the blueprint, House Republican goals in tax reform are to fuel job creation and deliver opportunity for all Americans, simplify the tax code by making it more fair and less burdensome, and transform the Internal Revenue Service (IRS) by making it more focused on consumer service. It maintains that the current tax code imposes burdensome paperwork and compliance costs; picks winners and losers by encouraging investment decisions based on tax savings instead of innovation; penalizes savings and investment; encourages businesses to move overseas; enables the IRS, which it describes as an example of executive branch overreach, blatant misconduct, and government waste; and stifles economic growth.
The blueprint notes that under the House Republican plan, no income group would see an increase in its federal tax burden. It characterizes the plan as revenue neutral; however, it further notes that revenue neutrality is maintained by the presumption of a "current policy baseline" that assumes that temporary tax policies would not expire, as opposed to Congressional Budget Office estimates that assume that temporary tax provisions would revert upon expiration dates assumed in current law. The blueprint also uses a dynamic scoring model that allows it to count as cost offsets expected positive revenue effects of economic growth. Dynamic scoring is considered controversial because of the difficulty of predicting the economic impacts of policies. Lastly, it assumes that Congress will repeal tax increases enacted in the Affordable Care Act.
Under this plan, House Republicans would reform significantly both the corporate and individual tax system.
Corporate tax reform highlights of the blueprint:
Individual tax reform highlights of the blueprint:
Regarding the housing market, the blueprint states, "[T]he nation’s housing market is tied more closely to the health of the overall economy than to any specific tax policies that might be in place." While the blueprint retains the mortgage interest deduction, it notes that the Ways and Means Committee, "will evaluate options for making the current-law mortgage interest provision a more effective and efficient incentive for helping families achieve the dream of homeownership."
The Ways and Means Committee now will begin working on turning the blueprint into actual legislation, which the blueprint states House Republicans will work to enact in 2017.
The blueprint specifically notes that the Ways and Means Committee will also consider comments it receives as it writes tax reform legislation, though it does not specify a process by which the Committee will go about accepting comments or a due date for comments. NCSHA intends to submit comments to the Committee in support of the Housing Credit and Housing Bonds.
The Tax Reform Task Force is one of six task forces that together are developing the House Republican agenda of what they would like to accomplish under a Republican president.