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senate Bill S. 3250

Should the Federal Gov’t Offer a Tax Credit to Subsidize Renters?

Argument in favor

For many Americans, just paying the rent and keeping a roof over their heads consumes more than a third of their total earnings. Offering refundable tax credits to subsidize rent will help many families afford the high cost of living by making housing more affordable.

Kaleigh's Opinion
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08/06/2018
It is insane that a two income house hold, both working 40 hours a week even at well over minimum wage still has to choose between the rent and keeping the lights on. Have to choose which bill to pay later than the others so that there is still a home to live in. And we’re so much more fortunate than so many others. This tax credit would help renters so much.
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burrkitty's Opinion
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08/06/2018
Since we can’t get living wages or rent control, let us help how we can. Catt is right that there should be steep steep taxes on unoccupied properties. Also the nay idea that a tax refund to renters will cause a rise in rent is BS. It’s way to disconnected and really exemplifies how out of touch with normal people the conservatives are. They really don’t get what it means to live paycheck to paycheck. Tax refunds are not guaranteed, only happen once a year, and vary wildly. Rent happens every month. No normal person is going to choose a monthly unaffordable rent based on a possible tax refund. That’s stupid and not how normal people choose housing. Landlords are already pushing the outer limits of what the market can bear. It took us 4 months to find “affordable” housing when we came back from Guam. “Affordable” meaning a third of our monthly income. Fair Market rent for my area is $1,529 for a one bedroom apartment. You have to clear 4500 monthly to the bank after taxes for that to qualify as “affordable”.
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Lisa's Opinion
···
08/06/2018
Yes they should —THE RENTS TOO DAMN HIGH! This is why we now have so many WORKING people forced to live on the country’s streets because they can’t afford the Rent even though they are working 2 or 3 Jobs. Maybe if the government would try to get Corporations to raise wages to a decent Living Rates we wouldn’t need This. So How do you like living in just another Shithole Country? Thanks Donald! Hey It’s true—Everything he touches does DIE!!
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Argument opposed

A federal program to subsidize renters would not only be tremendously costly for American taxpayers, but it’d encourage landlords to continue to raise rents while doing nothing to encourage the construction of more housing — the most effective way to lower housing costs.

Alex's Opinion
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08/06/2018
This will drive up the cost of rent. See college tuition and healthcare for examples and effects of federal injection of funds.
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SneakyPete's Opinion
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08/06/2018
Nope..... How about home owners who need help? They count also.
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Anthony4520's Opinion
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08/06/2018
No. How much money do these people think the government has? It’s ok if they want to pass some fair rent bill or whatever, but not this. It’ll only backfire and become a other useless program which is abused like welfare.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The house has not voted
  • The senate has not voted
      senate Committees
      Committee on Finance
    IntroducedJuly 19th, 2018

What is Senate Bill S. 3250?

This bill — known as the Rent Relief Act — would provide refundable tax credit to renters who spend more than 30% of their annual gross income on rent in housing that’s less than 150% of the fair market rent for their location as determined by the Dept. of Housing & Urban Development (HUD). The tax credit would cover a higher proportion of rent costs for lower-income renters, and wouldn’t apply to renters earning over $100,000 annually (or $125,000 for especially high cost areas as determined by HUD). A breakdown of how the tax credit would apply to renters in various income ranges can be found below.

The tax credit would cover the specified proportion of rent for renters in the following income ranges (note that the $100k references are changed to $125k for high cost areas):

  • Less than $25k: 100% of rent;

  • $25k - $50k: 75% of rent;

  • $50k - $75k: 50% of rent;

  • $75k - $100k: 25% of rent;

  • Over $100k: 0% of rent.

This legislation would apply to the 2018 tax year if enacted.

Impact

Renters meeting income thresholds; and HUD.

Cost of Senate Bill S. 3250

A CBO cost estimate is unavailable.

More Information

In-Depth: Sponsoring Sen. Kamala Harris (D-CA) introduced this bill to create a refundable tax credit to provide renters with relief from rising housing costs:

“America’s affordable housing crisis has left too many families behind who struggle each month to keep a roof over their head. This bill will ensure no family is priced out of the basic security of a place to live. Bolstering the economic security of working families would strengthen our country and increase opportunity.”

A column in National Review by Jibran Khan faulted Harris’s proposal for doing nothing to encourage housing reform to allow construction of more housing in high cost areas, and argued that the benefit to renters from the tax credit would be short-term:

“Why would the relief be short-term? Because as landlords become aware that renters are receiving a subsidy, they will simply raise rents by the amount of the subsidy. The cost will be the same for renters -- who today are lining up for a chance to rent, showing that they are willing to pay it. In the end, then, this would be an effective subsidy for landlords, not renters.”

This legislation has the support of four cosponsors, all of whom are Democrats.


Of Note: According to the Washington Post, Harris’s bill was influenced by a similar but smaller plan written by the Terner Center which was projected to cost $76 billion annually. For a sense of scale, the U.S. will spend roughly $23 billion on Section 8 low-income housing vouchers in FY2019, plus $12 billion on project-based Section 8 housing.


Media:

Summary by Eric Revell

(Photo Credit: iStock / ablokhin)

AKA

Rent Relief Act of 2018

Official Title

A bill to amend the Internal Revenue Code of 1986 to allow for a credit against tax for rent paid on the personal residence of the taxpayer.

    It is insane that a two income house hold, both working 40 hours a week even at well over minimum wage still has to choose between the rent and keeping the lights on. Have to choose which bill to pay later than the others so that there is still a home to live in. And we’re so much more fortunate than so many others. This tax credit would help renters so much.
    Like (73)
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    This will drive up the cost of rent. See college tuition and healthcare for examples and effects of federal injection of funds.
    Like (59)
    Follow
    Share
    Nope..... How about home owners who need help? They count also.
    Like (57)
    Follow
    Share
    Since we can’t get living wages or rent control, let us help how we can. Catt is right that there should be steep steep taxes on unoccupied properties. Also the nay idea that a tax refund to renters will cause a rise in rent is BS. It’s way to disconnected and really exemplifies how out of touch with normal people the conservatives are. They really don’t get what it means to live paycheck to paycheck. Tax refunds are not guaranteed, only happen once a year, and vary wildly. Rent happens every month. No normal person is going to choose a monthly unaffordable rent based on a possible tax refund. That’s stupid and not how normal people choose housing. Landlords are already pushing the outer limits of what the market can bear. It took us 4 months to find “affordable” housing when we came back from Guam. “Affordable” meaning a third of our monthly income. Fair Market rent for my area is $1,529 for a one bedroom apartment. You have to clear 4500 monthly to the bank after taxes for that to qualify as “affordable”.
    Like (37)
    Follow
    Share
    Yes they should —THE RENTS TOO DAMN HIGH! This is why we now have so many WORKING people forced to live on the country’s streets because they can’t afford the Rent even though they are working 2 or 3 Jobs. Maybe if the government would try to get Corporations to raise wages to a decent Living Rates we wouldn’t need This. So How do you like living in just another Shithole Country? Thanks Donald! Hey It’s true—Everything he touches does DIE!!
    Like (30)
    Follow
    Share
    No. How much money do these people think the government has? It’s ok if they want to pass some fair rent bill or whatever, but not this. It’ll only backfire and become a other useless program which is abused like welfare.
    Like (28)
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    This doesn't go far enough. The Cities and States should all be steeply taxing unoccupied properties, to increase the amount of rental property available to renters, and to bring the cost of rental housing down into a range where people can afford to keep a roof over their heads WITHOUT federal assistance. Far too many homes, buildings, and properties are bought purely for property investment, and kept empty so that the owners can game the real estate market while people freeze to death or die of sunstroke on the streets. It's appalling, and it should stop. Homes are for LIVING IN, not for keeping empty and laundering criminal money with!
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    It is not the governments responsibility (which means tax paying Americans) to pay for your housing, education, automobile, or medical expenses. Socialism does not work and is not compatible with the United States of America’s constitution or Bill of Rights! We are The United States of America - not the People’s Republic of America!
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    This bill is clearly well intended, but I fear the subsidies would be abused by landlords. Perhaps affordable housing is best handled at the state and local level.
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    No subsides. We need to cut spending not add to it. Supply and demand will take care of it. If people can’t afford it they can move somewhere else.
    Like (19)
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    Just more political theater from Socialist / Communist Kamila Harris. No chance it will go anywhere, for good reason. First, if enacted, rents would just increase to suck up much of the subsidy. The housing stock can’t expand fast enough to use up all the money. This is similar to what we have seen happen with college tuition pricing. It happens anytime there is too much money chasing something that has a finite capacity. Second, good public policy historically supports home ownership, not renting because home owners add greater stability to communities in the form of local involvement and lower crime. This bill would actually encourage people to sell their homes and get free rent from the government. It’s hard to think of anything dumber than that. To think this woman wants to run for President in 2020! Beware!!!
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    The government should just let those low income earners keep more of their hard earned money instead of taxing them through force and theft.
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    Good grief we act like we are a trillion dollars in profit , not deficit. When will these people realize we can't just wish money into existence. While this sounds like a nice idea it is simply irresponsible of our government to even consider it. I make enough to pay all my bills working a slightly above minimum wage job. Stop making excuses for yourselves and get to work.
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    Would be just another reason for owners to raise the rents on an enterprise already involved by too much government.....
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    Yes, rent and housing is getting out of hand. The rent is too damned high.
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    NO, we do not need to use MY tax money to subsidize others.
    Like (11)
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    No. Own your place, get a tax break. Enrich a landlord, gripe about your rent. The natural order of things.
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    Though this would be helpful in the shirt term the bigger problem is the high cost of rent. There needs to be something that either cracks down on rent costs or makes wages high enough to live on
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    A federal program to subsidize renters would not only be tremendously costly for American taxpayers, but it’d encourage landlords to continue to raise rents while doing nothing to encourage the construction of more housing — the most effective way to lower housing costs.
    Like (9)
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    You economic illiterates. THIS IS HOW YOU MAKE RENT COSTS SKYROCKET. You idiots did this to healthcare and those costs ballooned. You did it to college tuition and those prices have gotten egregiously out of hand. To hell with your supposed good intentions - YOU ARE VERY VERY BAD AT HELPING PEOPLE.
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