Overview
Title
To amend the Internal Revenue Code of 1986 to disallow the low-income housing tax credit to taxpayers that have diversity, equity, and inclusion initiatives.
ELI5 AI
In this bill, if a company or group is working to support different kinds of people or make sure everyone is treated fairly (like by having special programs or initiatives), they won't be allowed to get a special tax break for helping build homes for people with less money. But, this doesn’t affect regular people unless they’re part of such a company or group.
Summary AI
H. R. 10195 proposes changes to the Internal Revenue Code of 1986 to disallow the low-income housing tax credit for any entity that has diversity, equity, and inclusion initiatives. The bill specifies that even partnerships and S corporations with such initiatives will be barred from receiving the credit. However, the restriction does not apply to individuals unless they are part of a partnership or S corporation with these initiatives. These changes would take effect for taxable years beginning after the enactment of the Act.
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AnalysisAI
General Summary of the Bill
The proposed bill, titled the "No Discrimination in Housing Act," seeks to amend the Internal Revenue Code of 1986. Specifically, it intends to disallow the low-income housing tax credit to any entities that have implemented diversity, equity, and inclusion (DEI) initiatives. This amendment would apply primarily to partnerships and S corporations but would exclude individuals except when they are part of such business entities.
Summary of Significant Issues
A central issue with the bill is its lack of clarity regarding what constitutes a "diversity, equity, and inclusion initiative." The absence of a clear definition can lead to significant ambiguity and challenges in interpretation. This lack of definition may cause difficulties for entities trying to comply with the new rule as they may not understand whether their practices qualify as DEI initiatives under this legislation.
Another significant concern is the potential societal impact. By disallowing tax credits to entities based on their DEI practices, the bill could discourage the adoption of initiatives aimed at promoting diversity and equity. This stands in contrast to broader societal goals and expectations that encourage inclusive practices in various sectors, including housing.
The legislation could also introduce complexities for partnerships and S corporations. These complexities arise from the bill's attempt to apply the disallowance at both the entity and individual levels, leading to potential confusion in compliance and implementation.
Potential Impact on the Public
Broadly, the bill could impact the availability and development of low-income housing, as it would limit the financial incentives for entities that champion diversity, equity, and inclusion. This restriction could lead to fewer entities qualifying for tax credits, thereby potentially reducing the resources allocated to low-income housing projects.
The public, particularly those who benefit from low-income housing, might face reduced access to such accommodations if the availability decreases due to fewer incentivized developers in the market. The impact could be long-lasting as organizations may be hesitant to develop or maintain low-income housing without the financial benefit of the associated tax credits.
Impact on Specific Stakeholders
Entities with DEI Initiatives: Organizations with established diversity, equity, and inclusion programs might face a financial predicament under this legislation. If these initiatives disqualify them from valuable tax credits, they must weigh the benefits of retaining such programs against the financial disadvantage imposed by the bill.
Developers of Low-Income Housing: Housing developers might reconsider or restructure their approaches and policies, potentially moving away from progressive DEI policies to ensure access to these tax credits. This could stifle diversity and inclusion within the sector.
Beneficiaries of Low-Income Housing: Individuals who rely on or benefit from low-income housing could experience reduced options and availability, as developers may have fewer incentives to build or maintain such projects.
Society at Large: The move to penalize DEI initiatives, given their increasing acceptance and importance in fostering inclusive communities, may generate public debate. It could be perceived as counter to efforts in promoting societal equity and inclusion, potentially impacting public sentiment and voter priorities.
The bill, while addressing fiscal policy within the housing sector, raises substantial questions about the role of social responsibility in business practices and the implications of government intervention on such responsibilities.
Issues
The bill's language and intent to disallow the low-income housing tax credit to entities with diversity, equity, and inclusion initiatives may be perceived as politically motivated and potentially contentious, raising concerns about bias or discrimination in policymaking. This pertains primarily to Section 2.
The term 'diversity, equity, and inclusion initiative' is not defined within the text, leading to potential ambiguity about what qualifies as such an initiative, which is grounded in Section 2.
The amendment might discourage organizations from implementing diversity, equity, and inclusion initiatives, which could be seen as counterproductive to societal goals of promoting diversity and inclusion. This is relevant to Section 2.
The provision could create confusion among partnerships and S corporations due to the intersection between entity-level and individual-level applications of the tax credit denial, as specifically stated in Section 2.
There is a lack of clarity regarding how 'diversity, equity, and inclusion' initiatives are to be identified, verified, or policed under this amendment in Section 2.
The section providing the short title, "No Discrimination in Housing Act", does not contain detailed provisions of the Act, making it difficult to audit for issues related to spending or favoritism, as stated in Section 1.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
This section of the bill specifies that it will be known as the “No Discrimination in Housing Act.”
2. Low-income housing tax credit denied to entities that have diversity, equity, and inclusion initiatives Read Opens in new tab
Summary AI
In this section, the Internal Revenue Code is amended to disallow low-income housing tax credits to any entity that has diversity, equity, and inclusion initiatives. This rule applies to partnerships and S corporations, but not to individuals, and the changes take effect for taxable years starting after the law is enacted.