With the most sweeping tax overhaul in decades moving through Congress, Denver City Council authored a letter this week contending the Republican-led tax reform effort would harm the city’s “financial integrity and economic development.”
In the letter addressed to Colorado U.S. Sen. Cory Gardner and Michael Bennet, and Rep. Diana DeGette, the 13-member Denver council argued both House and Senate versions of a $1.5 trillion tax bill would have a “devastating impact” on the city.
That impact would be felt through decreasing funds for affordable housing through elimination of tax credits and increasing the cost of financing for infrastructure projects, council members said. Furthermore, tax bill provisions ending the state and local tax deductions on an individual’s federal income tax return would be “detrimental to the financial well-being of our citizens.”
Characterized by the New York Times as the most sweeping tax overhaul in decades, the bill would sharply cut the corporate tax rate, reduce the top individual tax rate and scale back many popular tax breaks. The House and Senate have agreed in principle to merge two versions of the tax bill. The legislation is currently on track to reach President Donald Trump’s desk by Christmas.
In the letter, the Denver council urged members of Colorado’s congressional delegation to add policies beneficial to the city when vetting tax reform — policies like tax-exemption for municipal bonds and private activity bonds. Those are mechanisms cities like Denver often rely on to finance large projects or help spur affordable housing.
The council also pointed to state and local tax deductions that protect against double taxation or tax credits including “New Market Tax Credits and Historic Preservation Tax Credit which build and preserve affordable housing; and generate economic investments in our most vulnerable and underinvested communities.”
Read the council’s full letter here.