Posted on October 2, 2017
After months of discussions behind closed doors, a group of six policymakers is scheduled to pull back the shades this week – perhaps as soon as Tuesday – and put out an outline for comprehensive tax reform. After the outline is released, “the tax-writing committees are going to take feedback and input, and then they’re going to go produce their bills in the weeks ahead,” House Speaker Paul Ryan says.
NAIOP’s legislative team has been working ahead of the process, meeting with lawmakers and their staff members throughout the year. NAIOP has emphasized that spending and tax reform bills should protect the interests of the CRE industry. That includes maintaining Section 1031 like-kind exchanges, protecting the deductibility of interest payments on financing and taxing real estate carried interest as capital gains instead of ordinary income.
Last week the Senate Finance Committee held a hearing on the importance of corporate tax reform. “Our current business tax system and the disparity between the U.S. corporate rate and our foreign competitors’ corporate rates has created a number of problems and distortions,” Senate Finance Committee Chair Orrin Hatch said.
There is broad agreement that lawmakers will pass some form of tax reform this year. A bill could slash taxes by as much as $1.5 trillion after an agreement last week between Republican Senators Bob Corker and Pat Toomey. But it is unclear how low personal or corporate tax rates could go, or whether lawmakers will attempt to eliminate particular tax credits and deductions.
As NAIOP President and CEO Thomas J. Bisacquino said in a note to members last week, “tax reform should lead to economic growth and job creation, and acknowledge the long-term nature of commercial real estate investment.” Bisacquino earlier took that message directly to policymakers with a July 28 opinion editorial in The Hill newspaper.