Methods of Urban Impact Analysis. No. 1: The President's Tax Program

摘要

The probable impact of President Carter's tax program on housing, cities, and community development is analyzed in this paper. The $25 billion tax cut package for 1978 - 79 is designed to provide general stimulus for the economy and offset the impact of the increases in social security taxes. Proposed changes fall into three categories: personal tax cuts and reforms, corporate cuts and reforms, and a few special reforms. The most significant urban implications of the proposed package would be a reduction in resources available for Federal initiatives such as the President's urban policy package; an increase in the need for such new Federal initiatives because of the anticity bias of some of the tax cut provisions, principally the liberalization of the investment tax credit; the use of a tax to stimulate the economy which almost completely bypasses the poorest segment of the population, those with incomes so low they already pay no income taxes; and little change in the distribution of Federal tax burdens among income classes since the increased progressiveness of the personal income tax will be coupled with the recent increase in social security taxes. Housing will realize a relatively small stimulative effect, but the net effect of curtailing accelerated depreciation, liberalizing the investment tax credit, and the creation of non - real estate tax shelters may be to make multifamily housing slightly less attractive to investors. The interaction of these changes and the investment stimulus of the overall tax package, however, make it impossible to determine the magnitude of this effect. (Author abstract modified).