The proposed Republican tax plan would cost Pamela Garlett, a retired Evergreen Public Schools teacher, an additional $1,350 if implemented as is.
“There is a real disparity in what’s being touted to us as being tax breaks and what will be reality for our family,” Garlett said Tuesday at 1st Street Apartments, where U.S. Sen. Maria Cantwell, D-Wash., hosted an event to discuss how the GOP tax plan would impact people’s lives in Clark County.
Garlett told the audience the additional cost is absorbable for her family at the moment, but as costs continue to increase and their income does not, that may not always be the case.
“Obviously it won’t be catastrophic initially, but it could be in the long run,” Garlett said.
The tax proposal would also negatively affect efforts to create more affordable housing, said Roy Johnson, executive director of the Vancouver Housing Authority.
Under the tax reform proposal, private activities bonds would be eliminated. Low-income housing tax credits, which were used to build the 1st Street Apartments, required those type of bonds.
“As a result (of the proposal), we’ll see such a significant reduction in what we’re able to do with affordable housing,” Johnson said. “There’s really no other mechanism that we have available to create affordable housing.”
Without the tax credit, the VHA would likely have to put off planned development projects, including 377 units of affordable housing slated for 2019 as well as 245 units of senior housing. Johnson said they would likely have to scrap a proposal for 122 additional units. And that’s just the impact on VHA, he said.
“We can’t keep with the pace as it is now, just imagine what it would be now if we had to stop,” Johnson added.
The plan also proposes reducing the mortgage interest credit and property tax deduction and eliminates the state and local tax deduction.
“We’re working very hard in tracking (the bill) but I guarantee you it has changed 10 times and never has it gone through a regulatory process,” Cantwell said.
Sue Pauley, a representative of Clark County Realtors Association, said homeowners rely on these benefits to purchase a home and fulfill the American dream.
“People have used these resources to send their kids to college or retire,” Pauley said. “It’s better than putting money in the bank.”
Homeowners also contribute significantly to local taxes: 83 percent of tax dollars are generated by homeowners, Pauley said.
“The losses in benefits for homeowners who support our neighborhoods would be a real detriment to this community,” she added. “It’s a real tragedy to see it change so drastically just to benefit corporations.”
Cantwell emphasized that the bill will impact several facets of people’s lives, but she was in Vancouver on Tuesday to focus on the impact to affordable housing in Vancouver and Clark County if approved.
“I guarantee you we cannot afford to go backwards from where we are today,” she said.
As it stands, there are only 16 available units for every 100 people in need of affordable housing, Cantwell said.
“If you really want to focus on the middle class right now and helping them and helping our economy grow, make an investment in housing,” she said.
As for individual taxes, Cantwell said about 18,000 Clark County families would see a tax increase of $2,700 next year, with that number increasing to 108,000 families in the next 10 years.
“That should not be the goal of tax reform,” she said. “Tax reform should be about lowering the burden on the middle class and helping our economy grow. What do we need to do to fix this? We need to slow down and start listening to middle-class families.”
