December 5, 2005In this issue:
In Delaware
*
Connections
CSP Receives AIDS Housing Grant
*
Capital Gains Tax Cuts Sharply Skewed to High Income
Elsewhere
* Tax
Cut Reconciliation Bill Includes Well-To-Do-Fare
*
Update
on FY2006 Funding for the Housing Voucher Program
* New
Manufactured Home Standards Published
* Manufactured
Housing Financing Modernization Bill
Connections CSP
Receives AIDS Housing Grant
Delaware was awarded a $1.3 million to provide housing for Delawareans
living with HIV/AIDS. The award was one of several totaling $18.7 million
announced nationwide on World AIDS Day. State HUD Office director Diane L.
Lello said the grant will be helpful, partly because, "unfortunately,
Delaware has the distinction of having one of the highest AIDS rates in the
nation -- No. 5 per capita."
Cathy McKay, president and chief executive officer of Connections Community
Support Programs, people living with HIV/AIDS spend two years or more
waiting for permanent, federally subsidized housing.
The grant, designed by Connections staff member Kirsten Olson, will provide
transitional housing and support services for families in Kent and Sussex
counties who would be homeless or at risk of homelessness, until their
permanent placements, a problem compounded by the serious shortage of
affordable housing, especially in in southern Delaware.
Connections Community Support Programs, based in Wilmington, is trying to
find one- and two-bedroom apartments in Dover with monthly rent of $500 to
$800 to serve as temporary homes for families with HIV/AIDS, while they
await permanent housing. To offer apartments, call housing coordinator
Dominique Upshur at 984-3380, ext. 175.
[Robin Brown,
rbrown@delawareonline.com ]
Capital
Gains Tax Cuts Sharply Skewed to High-Income
During consideration of the reconciliation tax-cut bill in coming weeks,
Congress is expected to debate whether to extend a variety of tax cuts
scheduled to expire in 2005 or subsequent years. Much attention is likely to
be focused on whether to extend the reduction in the capital gains tax rate
that was enacted in 2003 and that is set to expire in 2008.
Internal Revenue Service data for 2003 indicate the distribution in each
state of the benefits from the capital gains tax cut and thus provide a
sense of who will benefit from extending this tax cut.
The data, analyzed by CBPP, shows the percentage of tax returns filed in
each state that reported adjusted gross income of less than $50,000, and the
percentage in each state with income above $200,000. It also shows the
proportion of the total tax savings from the capital gains rate cut that was
received by each of these two income groups. The IRS calculated the savings
based on the net capital gains reported in each state.
For example, 70.7 percent of all filers in the nation had annual income
below $50,000 in 2003; but this group received only 3.2 percent of the
benefits from the capital gains tax cut that year. In contrast, those with
incomes above $200,000 represented 2.0 percent of all filers, but received
80.5 percent of the capital gains tax-cut benefits.
In Delaware, 67.5 percent of filers with annual income below $50,000
in 2003 received 1.1 percent of the benefits, while those with incomes above
$200,000 represented 1.9 percent of all filers and received 80.4 percent of
the capital gains tax-cut benefits.
The full report by Joel Friedman and Katharine Richards is available at
http://www.cbpp.org/11-7-05tax.htm
Tax Cut
Reconciliation Bill Includes Well-To-Do-Fare
It is expected that House leaders will schedule a floor vote on a $56
billion tax cut reconciliation bill when they return, possibly Dec. 7 or 8.
Unlike its Senate counterpart (which has already been passed on the floor),
the House bill includes a controversial extension of tax breaks for capital
gains and dividends—a tax break which overwhelmingly benefits millionaires.
A vote on the House tax cut bill was planned before the Thanksgiving recess,
but members balked at voting for tax cuts for millionaires on the very same
day as they voted to cut Medicaid, food stamps, child support enforcement,
student loans and other vital services.
Some Points:
* The tax breaks in the House bill overwhelmingly benefit the wealthy few.
Over 40% of the benefits go to people with incomes over $1 million.
(Analysis by the Center on Budget and Policy Priorities is available at
http://www.cbpp.org/11-17-05tax.pdf )
* The House tax cut bill will increase deficits.
After cutting $50 billion from critical services for vulnerable Americans in
the name of deficit reduction, the House proposes to spend even more--over
$56 billion--on tax cuts. And if the bill passes, the cost is likely to grow
in conference, since the Senate and House bills include different tax cuts.
(CBPP analysis
http://www.cbpp.org/11-17-05tax.pdf )
* The House tax cuts will not promote jobs and economic growth.
(See
Tax cuts don't create jobs: New
report in the previous AHB.) There is little economic evidence that
extending the tax cuts for dividends and capital gains will strengthen the
economy (CBPP analysis
http://www.cbpp.org/11-9-05tax.pdf ) or that the Bush tax cuts as a
whole have improved the labor market for working families (United for a Fair
Economy analysis
http://www.faireconomy.org/press/2005/NoThanks.pdf ).
It remains unclear if the House leadership has sufficient backing from
moderate Republicans to pass the tax cut bill. A host of moderate House
Republicans have presented a major problem for the leadership team over the
past few weeks, refusing to fall into line and lend their support to the
spending cuts bill.
Delawareans opposed to the tax cuts will be gathering at Gunning Bedford
Middle School for a rally today, December 5, at 5:30 PM.
More background on this issue is available at:
http://www.ombwatch.org/article/articleview/3188/1/404.
[Lee Farris, Senior Organizer on Estate Tax Policy, United for a Fair
Economy, lfarris@faireconomy.org
]
Update
on FY2006 Funding for the Housing Voucher Program
Congress approved the final fiscal year 2006 appropriations bill for the
Department of Housing and Urban Development (HUD) on November 18, 2005. The
President is expected to sign the bill shortly. A a memo from CBPP with our
initial assessment of the housing voucher provisions of the bill can be
found at
http://www.cbpp.org/pubs/housing-insert-c.htm. In sum, while the funding
level in the bill for the housing voucher program is a significant
improvement over 2005, the bill continues to allocate funding among state
and local housing agencies using essentially the same arbitrary policy as in
2005.
By again tying funding to voucher use in a three-month snapshot period in
2004 without accurate adjustment for cost changes, the bill will leave most
agencies without the funds needed to use all their vouchers. While some
agencies will be able to serve more families than in 2005, others will have
to shelve vouchers as families leave the program or take further steps to
shift costs to owners and poor households.[Barbara Sard,
bsard@rcn.com, Director of Housing Policy
Center on Budget and Policy Priorities]
New Manufactured
Home Standards Published
HUD's Manufactured Home Construction and Safety Standards will change,
effective May 30, 2006, in accordance with consensus committee
recommendations and public comments on a proposed rule published December 1,
2004. See Federal Register, 11/30/05, pp. 72023-52 or
http://www.hudclips.org. Contact
William W. Matchneer III,
HUD, 202-708-6401. [HAC News, November 30, 2005,
AliceSettle-Raskin@RURALHOME.ORG]
Manufactured Housing Financing Modernization Bill
Introduced on June 8, 2005 and supported by close to 100 representatives
across the nation, H.R. 2803 would modernize the manufactured housing loan
insurance program under title I of the National Housing Act. Its purpose is
to provide adequate funding for FHA-insured manufactured housing loans for
low- and moderate-income homebuyers and to modernize the FHA Title I
insurance program. Its last major action was was 7/29/05 where it was
referred to the Subcommittee on Housing and Community Opportunity.
[Stephanie Maddin, Graduate Research Assistant, Delaware Community Legal Aid
Society,
stephaniemaddin@yahoo.com]