Dueling Tax Proposals as Election Looms

Posted on November 7, 2018

President Donald Trump and Republican lawmakers are promising to pass legislation to deliver further tax relief for the middle class.

“Business will not enter into it, and this will be on top of the tax reduction that the middle class has already gotten, and we’re putting in a resolution probably this week,” Trump told reporters in the Oval Office last week.

Lawmakers are out of session until after Election Day, Nov. 6. Rep. Kevin Brady, chair of the Ways and Means Committee, said, “We will continue to work with the White House and Treasury over the coming weeks to develop an additional 10 percent tax cut focused specifically on middle-class families and workers, to be advanced as Republicans retain the House and Senate.” Brady also hinted Republicans may cut government spending if they retain the House.

The Senate is a potential stumbling block. “It would be very difficult at this particular time” to pass additional tax reform, Senate Finance Committee chair Orrin Hatch told reporters. But he didn’t completely rule it out, adding, “I’ve seen miracles happen before.”

Earlier this fall, the House passed what it called “Tax Reform 2.0,” which aimed to make some features of last year’s tax reform package permanent. The Senate has not considered that measure.

NAIOP supported the 2017 reform, which sharply reduced tax rates while preserving incentives, such as 1031 Exchanges, that are important to commercial real estate. However, the law did contain some important drafting errors, including a typo that changed the intended tax status of Qualified Improvement Property (QIP).

NAIOP is working with a coalition of 300 organizations and businesses to stress the need for lawmakers to fix the QIP mistake during a lame duck session after the November elections.

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