by Mitch Kokai
Senior Political Analyst, John Locke Foundation
As Republicans pursue tax reform, Cato has released a study on one corporate tax break that is ripe for repeal.
In “Low-Income Housing Tax Credit: Costly, Complex, and Corruption-Prone,” Vanessa Brown Calder and I describe the multiple failures of this credit.
The LIHTC is inefficient and bureaucratic. It breeds corruption in local governments and crowds out market-based housing.
Under current law, the LIHTC will reduce federal revenues by almost $100 billion over the next decade, with 95 percent of the tax benefits going to corporations, mainly big banks. Repealing the LIHTC would simplify the tax code and generate revenues to offset the corporate tax rate cut.