Last-Minute Real Estate Tax Break In GOP Bill Will Benefit Trump
BY JOSH KEEFE @THEJOSHKEEFE AND DAVID SIROTA @DAVIDSIROTA AND ALEX KOTCH @ALEXKOTCH ON 12/16/17 AT 2:58 PM
President Donald Trump has made tens of millions of dollars of a specific kind of income that could be subjected to a last-minute tax break inserted into the Republicans’ tax legislation released Friday, according to federal records reviewed by International Business Times. The same is true for Tennessee GOP Sen. Bob Corker — a commercial real estate mogul who suddenly switched his vote to “yes” on the tax bill after the provision was added to the legislation. Previously, Corker was the only Republican to vote against the Senate version of the bill.
Trump told a Missouri crowd on Nov. 29 that he would personally take a hit from the GOP tax plan. “This is going to cost me a fortune, this thing, believe me...I have some very wealthy friends. Not so happy with me, but that’s OK," Trump said. But a variety of experts have concluded that the tax bill overwhelmingly favors the wealthiest Americans — especially those with complex real-estate investments.
The reconciled tax bill includes a new 20 percent deduction for so-called “pass-through” entities, business structures such as LLCs, LPs and S-Corporations that don’t pay corporate taxes, but instead “pass through” income to partners who pay individual tax rates on that money. The Senate version of the bill included safeguards that would only allow businesses to take advantage of the new break if they paid out significant wages to employees.
But the new provision, which wasn’t included in either version of the bill passed by the House and Senate, and was only added during the reconciliation process, gives owners of income-producing real estate holdings a way around that safeguard, effectively creating a new tax break for large landlords and real estate moguls.
"This change will primarily benefit wealthy investors with lots of assets and few employees,” Matt Gardner, a Senior Fellow at the Institute on Taxation and Economic Policy, told IBT in an email. “You can't describe this as a job-creation strategy with a straight face, which begs the question of why anyone thinks this last-minute change was a good idea."
Because the new language wasn’t in the bills passed by the House and Senate, Democrats cannot offer a floor amendment to eliminate the provision, which experts say would reduce the amount of money that Trump, Corker and other wealthy lawmakers owe to the IRS on their real-estate-related pass-through income.
The revelations about the provision potentially enriching Trump, Corker and other Republican lawmakers drew a swift rebuke from Democratic U.S. Sen. Chris Van Hollen.
“Writing a tax bill that puts the very wealthy and special interests before working families was bad enough – but to slip in a last minute provision that could give even more of a windfall to people like President Trump and some Republicans in Congress is unconscionable,”
Van Hollen told IBT. “It’s not too late for my colleagues to do the right thing. I urge them to put politics – and personal profit – aside, and stop this scam that will leave millions of middle class Americans paying more and cause the debt to skyrocket.”
more:
http://www.ibtimes.com/political-capital/last-minute-real-estate-tax-break-gop-bill-will-benefit-trump-2629381
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