Cato study outlines one corporate tax credit that’s ripe for repeal

Chris Edwards of the Cato Institute highlights the following information about his latest study.

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.

Mitch Kokai / Senior Political Analyst

Mitch Kokai is senior political analyst for the John Locke Foundation. He joined JLF in December 2005 as director of communications. That followed more than four years as chie...

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