This presidential race continues to be a disaster when it comes to issues we care about. No mention of affordable housing, no real debate on how to solve the ongoing foreclosure crisis, and an utter lack of concern about the housing challenges faced by low-income folks in this brutal economy. In the second debate, there was not a single mention of the impending sequestration crisis, which will have a devastating impact on the nonprofit housing sector. And there is plenty of blame to go around—both candidates are falling short in this regard.
As usual, the Republican candidate is running on a platform of simplifying the income tax code. This time around, his magic solution to our economic woes is to reduce tax rates for all Americans, coupled with the closing of all sorts of tax loopholes. Let’s make the tax code simple, and get rid of the zillion tax deductions that are too complicated for regular folks to take full advantage of.
The problem is, the nonprofit housing sector depends mightily on one of those “loopholes”, namely the charitable tax deduction. When Romney talks about closing loopholes, and fails to identify a single one he would eliminate, it occurs to me that his tax plan could be cataclysmic for the sector where I’ve made my livelihood for the past 25 plus years.
Some people I know don’t take this stuff seriously. They just assume this is the usual hot air, no different than school prayer or bans on abortions, where the Republican candidate panders to his base with no intention of actually following through.
I take this stuff seriously. Every previous Republican president in recent memory has tried to push through tax cuts for high income earners, so why shouldn’t I take this man at his word? And I take it personally, because I come from a family that actually talked about tax policy, as nerdy as that sounds.
My dad was an old-school tax attorney, who believed that the tax code should be used to encourage socially responsible behavior. To his way of thinking, a simple income tax without deductions to provide incentives for people to “do the right thing” would be utter foolishness—a complete waste of the power of government to improve the lives of its citizens.
What Romney is proposing is both foolish and reckless. Foolish because the strategic use of tax deductions has done an enormous amount of good for this country. Reckless because he fails to name a single deduction among the many he would eliminate.
In so doing, he points a dagger at the heart of the nonprofit housing sector, at a time when we are already facing a staggering number of challenges. We would be wise to take him at his word, and act accordingly.