Fact Checker: How many Iowans benefit from Cory Booker’s proposed renters tax credit?

Democratic presidential candidate and New Jersey Sen. Cory Booker claims in his 2020 Housing Plan, released in June, that his refundable renters tax credit would benefit 171,000 Iowa families with a median benefit of $3,400.

Analysis

The claim is based on a May analysis by the Columbia University Center on Poverty and Social Policy, which examines five legislative proposals designed to reduce poverty and inequality in America. Several of the proposals were sponsored in Congress by Democrats running for president.

A related policy brief published by Columbia in February summarizes the Housing, Opportunity, Mobility and Equity Act of 2018, sponsored by Booker and similar to his 2020 Housing Plan. Columbia estimates this plan would cost the country $134 billion, the second-most expensive of the five proposals examined in the policy brief.

Booker said in a May 30 press call attended by The Gazette that he would pay for the plan by reversing President Donald Trump's tax cuts and making other changes, such as taxing longer-term capital gains at a higher rate and changing the inheritance tax.

As part of his housing plan, Booker supports a refundable tax credit to people paying more than 30 percent of their adjusted gross income on rent.

The May analysis simulates the potential impact of the proposed tax credit based on the most recent five years of data from the U.S. Census Bureau's Current Population Survey, which includes income from 2013 to 2018.

'We simulate Supplemental Poverty Measure poverty rates before and after the proposed credit and estimate the number of families and individuals benefiting as well as the typical credit per benefiting family,” Columbia reports on the methodology of the analysis.

More than 57 million Americans would benefit from the renters tax credit proposed by Booker, with a $4,800 median credit for benefiting families, Columbia reported.

In Iowa, 171,000 families would benefit with a median family credit of $3,400, according to the Columbia analysis.

To get help reviewing the methodology of Columbia's analysis, the Fact Checker reached out to Dave Swenson, a community economics research and education specialist at Iowa State University.

Columbia's decision to use five years' worth of census data was critical to get a large enough sample to have confidence in the data, especially when looking at just one subset - in this case, people in poverty, Swenson said.

Swenson said he wasn't sure why Columbia had a larger number for Iowa cost-burdened families (171,000) than the Census Bureau's American Community Survey had for cost-burdened households (144,500), but he said it may be using a broader definition of income and poverty.

Sara Kimberlin, co-author of the Columbia analysis, said in an email to The Gazette that the analysis used data from the Current Population Survey, not the American Community Survey, because Booker's housing plan calls for using adjusted gross income to determine a cost-burdened household, and that data comes from the Current Population Survey.

In the Current Population Survey, adjusted gross income is reported for the tax filer in each household with the highest adjusted gross income, which is different from the total household income calculated by the American Community Survey, she said.

'As a result, housing burden estimates calculated based on total household income would be expected to be smaller than estimates calculated based on AGI of the tax filer with the highest AGI,” Kimberlin said.

Since the Current Population Survey doesn't have direct information on the amount of rent paid by households, analysts used a regression model estimated in American Community Survey data based on household characteristics similar to both data sets, Kimberlin reported.

Swenson would have liked to see Columbia report its margin of error with the analysis.

'The margin of error helps us learn, given the stated number, how low that number could be or how high,” he said. 'The proportionate MOE grows as the sample is subdivided; hence, statistics for, say, Iowa's black population in poverty would have MOEs that were a larger percentage of the reported value than would be the case for the much larger white sample in that survey.”

Columbia reported the reason it did not include the margin of error on the brief was to keep it short and straightforward.

Overall, Swenson said his gripes are academic, and Columbia, a private Ivy League research university, is a credible source for an analysis of this type.

'Those folks are good, and there is no reason to doubt their methods,” he said.

Conclusion

Helping Americans get out of poverty is a major thrust for many of Democrats running for president. Booker's 2020 Housing Plan includes a renters tax credit Columbia says would aid 171,000 Iowa families by returning an average $3,400 to each eligible family. The whole plan would cost the country $134 billion, Columbia estimates.

In releasing the plan, Booker quotes Columbia data, which Swenson said uses a sound methodology overall.

We give Booker an A.

' This Fact Checker was researched and written by Erin Jordan of The Gazette.