NAHB Opposes House Democrats’ Plan for $2 Trillion in New Taxes

Filed in Advocacy, Housing Affordability, Tax Reform by on September 14, 2021 22 Comments

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.

Read NAHB’s letter to the House Ways and Means Committee.

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Comments (22)

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  1. Nan Danford says:

    We cannot let this happen!

  2. Monica Sommerfeldt Lewis says:

    Is it true there is the following included in this? From the The County Eagle

    While Austin Bank does not normally engage on topics relating to politics, we feel there is an URGENT matter pending in Congress that needs your attention.
    The Biden Administration is proposing a sweeping expansion of tax information reporting to be included in the budget reconciliation process.
    This proposal, if enacted, would require banks and other financial institutions to report to the IRS detailed information of inflows and outflows on every customer account with a balance of more than $600.
    This proposal goes against one of Austin Bank’s core values – confidentiality.
    Every American has a reasonable expectation of financial privacy, and this proposal would jeopardize that right.
    Austin Bank does NOT support the proposed new IRS reporting requirements affecting you, our customers!
    The Texas Bankers Association has created an easy way for you to contact your House of Representatives member as well as Senators Cornyn and Cruz regarding opposition to this proposal.
    Simply click here (https://www.texasbankers.com/actioncenter?_zs=RFOP81…) to visit TBA’s Grassroots Action Center. The second section specifically addresses bank customers and provides a link to “Take Action”. You will input your address and select “Customer Opposition Letter” from the group dropdown box. Click “Go” and you will be directed to a new page with an opportunity to enter your contact information and a copy of a pre-prepared letter. You then have options to preview, send or print and mail the letters.
    We strongly encourage you to reach out to our Texans in Washington to let them know how you feel about this proposal.
    Jeff Austin III, Vice-Chairman of the Board
    Russ Gideon, President/CEO

  3. Jeff Teddy says:

    I agree with your letter to lawmakers opposing the $2 Trillion in new taxes. We need government to stop spending and live within a budget. The current rate of inflation should be a major concern for all lawmakers if it is not acted upon soon our entire economy could collapse.

  4. I disagree. Our industry will benefit from the Climate Change initiatives included in this legislation. Home Builders will also benefit as more families are able to enter the housing market due to the human infrastructure portion of this legislation.

    • Jerry a Sinclair says:

      well said. I believe there is more good for the average families that out weigh the negatives for the very well off.

  5. CR Bickley says:

    I disagree this tax height will not harm middle American and is much needed for the country.

  6. Farrell Sheppard says:

    Thanks to the NAHB for opposing this massive tax hike. I do agree that there is some need for actual infrastructure (roads, bridges, airports, etc. spending. However, human infrastructure is only an attempt to create more social programs. The taxes will kill jobs and many will become even more dependent on government.

  7. Greg Cantori says:

    You are fear mongering. The vast majority of impact will be for highly profitable businesses and the wealthiest individuals both of which have been underpaying their fair share of taxes. . I’m embarrassed and angered by my association here. We provide low and no cost handyman services to the elderly and disabled primarily because they are left out while wealthy people continue to horde money and assets. .

  8. Small Georgia Builder says:

    The changes identified in the article are very misleading.
    The marginal rates would not affect the largest section of NAHB Builders, which is builders building less than 100 homes per year.
    The marginal individual tax rates would increase for those individuals making more than $400,000 and is highest for those making over $1 million.
    The Capital Gains would only hit those making over $1 million.
    The Child Tax credit would benefit hard working middle class Americans.
    This is a family first package.
    If you work for a large builder they may be hit, but if you are a small builder you will benefit from this package regardless of your political affiliation.

    • Builderran says:

      How do I benefit when this package eliminates the 20% pass through QID deduction most all small home builders benefit from?? I will automatically pay more taxes as my adjusted income will be 20% higher.
      They make these bills such monstrosities that nobody ever really knows until it’s passed and the bureaucracy then interprets it.

      • Georgia Builder says:

        Phase out the deduction for taxpayers with taxable income above $400,000, with a full phaseout at $500,000
        Remove the limitations of the deduction for a “specified service trade and business,” which include services in health care, law, finance, accounting, athletics, consulting, and the performing arts
        Forbid deduction for married taxpayers filing separately, and for estates and trusts
        Stop the misinformation.

    • One thing to keep in mind is that when someone goes to sell their small business that they have built for 30-40 years, they will most likely be in this million-dollar capital gain section. It’s a one-time sale that will now be hit with a large one-time tax, rather than just their normal tax rate.

      • Georgia Builder says:

        it is for those with an INCOME of million dollars, not the value of the asset being sold. Also, if you’re not currently working with a good tax Accountant specializing in real estate, you need to do so now.

        • Dan Sloan says:

          That is Incorrect…. when you sell a business you may have spent decades building up, you will have a one time “Income” over over 1mm almost certainly…
          and you will pay the mysterious rates and 3.0 % surcharge and etc, etc pilling on
          to punish high earners for their success. (The greedy congress put in no formula/adjustment for typical or average income vs. a rare sale of a business…
          This set of proposed tax increases would be a rolling economic disaster and
          tank the economy in fairly short order… but would be a bonanza for Tax Attorneys and Accountant and Tax Shelter Promoters!

    • Jack Smith says:

      Frankly you’re incorrect. This bill is a benefit only to those that “take” from the system. Expanded Child Tax Credit is simply another means of wealth redistribution/ a/k/a welfare !

  9. Ted Clifton says:

    We need this infrastructure bill. I believe the NAHB is wrong on this one. This is exactly what the building industry needs.

  10. Dave Gale says:

    I disagree with the NAHB opposition to this much needed, and long overdue adjustment to our federal income tax policy. Those of us fortunate enough to have high incomes should pay more taxes and not enjoy unfair tax tricks and loopholes.

  11. Murray Rust says:

    NAHB should focus on the parts of the bill that are truly objectionable such as the capital gains tax increase and they should make sure that businesses and farms can be handed down from generation to generation. We desperately need the climate mitigation parts of the bill and then some. Don’t throw the baby out with the bathwater.

  12. Gary Newman says:

    The Reconciliation package does indeed reverse some of the 2017 massive tax cut that mostly benefited the 1% and corporate interests and that increased the deficit substantially. Investing in our future needs to call on those individuals and corporations to pay a fair share to address the country’s decaying infrastructure (from which they have benefited) as well as upgrading our energy and housing sector responding to the existential crisis of climate change. NAHB might recognize that there will be a plus in increased work and jobs for our building sector in doing so. I think it better to use funds for sustainable development instead of the many billions of emergency funds that have been called upon for climate disasters. It is incumbent on all of us to think long term rather than short term for the benefit of our children and grandchildren.

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