H.R.3540 - Low-Income Housing Tax Credit Elimination Act (119th Congress)
Summary
H.R.3540, the "Low-Income Housing Tax Credit Elimination Act," proposes to amend the Internal Revenue Code of 1986 by sunsetting the low-income housing tax credit. This bill, introduced in the House of Representatives, aims to eliminate the tax credit for any building placed in service in a taxable year beginning after the date of enactment. The bill is sponsored by Mr. Grothman and Mr. Gosar and was referred to the Committee on Ways and Means.
Expected Effects
The primary effect of this bill, if enacted, would be the cessation of the low-income housing tax credit program. This would likely lead to a decrease in the development of new low-income housing units. It could also impact existing affordable housing projects that rely on these tax credits for financing and maintenance.
Potential Benefits
- Potentially reduce government spending and simplify the tax code.
- May incentivize alternative, potentially more efficient, methods of supporting low-income housing.
- Could lead to a reassessment of housing policies and the development of innovative solutions.
- May free up resources for other social programs or tax cuts.
- Could decrease the influence of developers seeking tax credits.
Most Benefited Areas:
Potential Disadvantages
- Reduced incentive for private developers to invest in low-income housing, potentially exacerbating housing shortages.
- Increased difficulty for low-income individuals and families to find affordable housing.
- Potential for increased homelessness and housing instability.
- Negative impact on communities with a high need for affordable housing.
- May increase the burden on other social welfare programs.
Constitutional Alignment
The bill's constitutional alignment is primarily related to the power of Congress to levy taxes and appropriate funds for the general welfare, as outlined in Article I, Section 8 of the Constitution. The elimination of a tax credit falls within this purview. However, the potential impact on social equity and the general welfare could raise concerns if the elimination of the credit leads to significant housing instability and hardship for vulnerable populations. There is no explicit constitutional requirement to provide low-income housing, but the government's actions should not violate other constitutional protections.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).