When the Mercury wrote in February about how Donald Trump's pledge to slash corporate taxes could decimate funding for affordable housing, most people we spoke with were still a touch optimistic. Sure, Trump had campaigned on a pledge to chop the tax rate significantly, but analysts figured that might have been bold talk.
Well, Trump's still talking.
Today, his administration revealed a bare bones tax plan that involves chopping the corporate tax rate from 35 percent to 15 percent.
The proposal's being pilloried as a give-away to the rich, likely to further exacerbate the growing wealth inequality plaguing the country, and balloon the federal deficit to unacceptable levels. Trump's folks are claiming the lost revenue will be made up for by economic growth. There's still no indication that any of this will ultimately pass congress.
But as everyone loses their minds over this, we want to point out again how real the consequences could be for the affordable housing projects Portland is counting on.
As we've reported, many of those housing projects are highly dependent on tax credits they're awarded by the state. And until Trump was elected, corporations were keen on obtaining those credits to slash their tax bills.
That changed with the prospect of "tax reform" on the horizon. Corporations became more cautious, reasoning they might save money if they waited for Trump to act.
Backers of two projects we spoke with suddenly found themselves staring down funding shortfalls of millions of dollars. The State of Oregon held a special meeting to figure out how to deal with the downturn in demand for credits.
Now Trump is proposing an ultra-steep cut—slashing corporate taxes by more than half. And while it's too early to say whether such a cut would have corresponding safeguards for affordable housing, what analysis exists looks bad.
Late last year, San Francisco-based firm Novogradac & Company estimated that Trump's tax cut could amount to $2.2 billion less raised for low-income housing, meaning "as many as 16,000, or more, fewer affordable rental homes created or preserved each year."
Bad news, in short. But you're used to that.