Revenues
Repeal the Low-Income Housing Tax Credit
CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.
The federal government allocates a fixed amount for the Low-Income Housing Tax Credit (LIHTC) for states to distribute to real estate developers who construct new housing or substantially rehabilitate existing housing and reserve some of the units for low-income households.
According to an estimate by the staff of the Joint Committee on Taxation, repealing the LIHTC would increase revenues by $42 billion from 2016 through 2025.