NAHB is sounding the alarm to lawmakers as House Democrats within the Ways and Means Committee begin consideration of a massive overhaul of the tax code which would generate over $2 trillion in additional tax revenue over the next 10 years.
While the legislation also includes critical and much-needed affordable housing investments, this is far outweighed by trillions of dollars in job-killing tax hikes — which risk broad harm to the still fragile economy — along with direct and indirect cost increases on housing.
These changes are being considered to fund part of the Democrats ambitious Build Back Better plan, which focuses on what the White House refers to as "human infrastructure."
The most concerning tax changes in the plan would:
- Increase the marginal tax rates on individuals as well as corporations;
- Reduce 1202 gains for certain small business investors;
- Increase the capital gains rate;
- Expand the application of the Net Investment Income Tax to active income;
- Limit 199A deductions;
- Alter the estate tax that may affect family-owned businesses; and
- Otherwise limit business losses.
Many of these tax hikes will inevitably be passed along to new home buyers and renters and will result in a reduction of home building activity at a time when greater supply is urgently needed.
NAHB is fully engaged with Congress and working to blunt or roll back these proposed tax increases. If the Democrats remain unified, the procedural process being used by the Democrats allows them to move forward without Republican support, avoiding the filibuster in the Senate. This process has been used various times by both parties to enact many policy priorities, including by Republicans to enact tax reform in 2017 and Democrats to overhaul the health care system in 2010.