Democratic Rep. Gary Ackerman plans to introduce legislation aimed at jumpstarting the housing market by providing two new enticements to homebuyers.
The housing plan would be paid for by temporarily reducing the tax rate that corporations pay when they bring overseas earnings back to the United States, the New York congressman said in a press release.
The bill would provide two million homebuyers $20,000 each as a matching subsidy for a down payment. The subsidy would be structured as a loan, which would be forgiven over the course of five years, as long as the buyer continued to live in the house.
In addition, the legislation would offer a 10-year tax exemption on rental income to one million investors who purchase single-family homes as rental properties.
Ackerman estimates that the cost of the program would be covered by a one-year reduction in the corporate tax rate on repatriated earnings, from 35% to 10%. He said the tax holiday would spur U.S. companies to bring home billions of dollars that is currently parked overseas.
"This would clear the way for new housing starts, and put millions of Americans back to work," Ackerman said in a written statement. "It would incentivize corporations to bring their cash cheaply back to the United States."
The idea of a corporate tax holiday appears to be gaining momentum in Congress. A similar measure passed Congress in 2004. Critics of that legislation say that it simply encouraged American corporations to wait for the next tax holiday before bringing overseas earnings back home.
The Congressional Budget Office has yet to make cost estimates on Ackerman's legislation. Ackerman's office said that it does not yet have specific estimates of the bill's impact on government outlays and revenues.