December 22, 2012
NY Times: Congress Must Preserve the Low-Income Housing Tax Credit
New York Times editorial: A Tax Credit Worth Preserving:
Lawmakers interested in simplifying the corporate tax code must take care to protect the low-income housing tax credit, which allows corporations to reduce their tax liabilities by investing in affordable housing. Without it, affordable-housing construction, which already falls far short of the need, would quickly grind to a halt.
Created by Congress in 1986, the credit is available to investors prepared to sink money into new or rehabilitated low-income housing. It is responsible for about 90 percent of all the affordable housing that is built in this country, and has provided more than 2.5 million rental units since its inception. It also produces as many as 100,000 jobs each year.
The system is especially useful in times of disaster. After Hurricanes Katrina and Rita, for example, the credits were used to finance about 27,000 affordable homes and apartments in the affected states. This same mechanism could be extremely useful in the wake of Hurricane Sandy.
(Hat Tip: Mike Talbert.)
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Why subsidize production in a sector of the economy that is depressed with an excess of supply?
When people need "affordable" automobiles, they buy used cars (and these are affordable, at least when the government hasn't mandated their wholesale gratuitous destruction with crazy "cash for clunkers" schemes).
The editors of the N.Y. Times may not understand this, but poor people understand it intuitively.
So, why build new housing for those needing "affordable" housing when there is plenty of used housing on the market already. If the editors of the N. Y. Times are concerned about the price of housing and a lack of supply in the wake of Hurricane Sandy, why not editorialize for repealing rent control which has left N.Y.C. with an artificial housing shortage since WWII - and which is well calculated to leave N.Y.C. especially vulnerable to catastrophes such as hurricanes?
But this is all a digression: If we're going to have an income tax, we should be attempting simply to tax income fairly calculated.
Posted by: Joseph W Mooney | Dec 23, 2012 7:09:42 AM
Steps should be made to immediately preserve all low income programs for the short term and at least come up with a gradual reduction. Immediate cutting of programs would be tragic for millions.
Posted by: Anthony K | Dec 31, 2012 3:23:51 PM
There's definitely an overabundance of demand, but there's also a shortage of affordable education and well paying jobs to accommodate this demand.
Posted by: Affordable Cable | Jan 19, 2013 8:29:01 PM