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The Newly Revised GOP Tax Plan |
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Posted by Stephen Bauman on Mon Dec 18 12:47:57 2017 guess who benefits?U.S. DEC 18, 11:55 AM EST BUSINESSPOLITICAL CAPITAL Donald Trump And GOP Leaders Could Be Enriched By Last Minute Tax Break Inserted Into Final Bill BY DAVID SIROTA @DAVIDSIROTA AND JOSH KEEFE @THEJOSHKEEFE ON 12/15/17 AT 9:33 PM Republican congressional leaders and real estate moguls could be personally enriched by a real-estate-related provision GOP lawmakers slipped into the final tax bill released Friday evening, according to experts interviewed by International Business Times. The legislative language was not part of previous versions of the bill and was added despite ongoing conflict-of-interest questions about the intertwining real estate interests and governmental responsibilities of President Donald Trump — the bill’s chief proponent. The Trump organization and the Kushners (the family of Ivanka's husband, Jared) have overseen vast real estate empires, and top GOP lawmakers writing the tax bill collectively have tens of millions of dollars of ownership stakes in real-estate-related LLCs. The new tax provision would specifically allow owners of large real estate holdings through LLCs to deduct a percentage of their “pass through” income from their taxes, according to experts. Although Trump, who became famous for his real estate holdings, has transitioned into branding in recent years, federal records show Trump has ownership stakes in myriad LLCs. The new provision was not in the bill passed by the House or the Senate. Instead, it was inserted into the final bill during reconciliation negotiations between Republicans from both chambers. The provision, said experts, would offer a special tax cut to LLCs with few employees and large amounts of depreciable property assets, namely buildings: rent generating apartment and office buildings. “This helps people who have held property for awhile, like Donald Trump,” David Kamin, an New York University law professor who served as a special assistant to the president for economic policy in the Obama administration, told IBT. “If you’ve got an LLC that’s a trade or business with a bunch of real estate holdings and few employees, [I] think you’re now golden. You get the deduction.” Similarly, Urban-Brookings Tax Policy Center senior fellow Steve Rosenthal told IBT the provision would specifically benefit real estate investors. “It would benefit real estate businesses especially, which typically operate as pass-through businesses, most often LLCs,” said Rosenthal, a former tax attorney at Ropes & Gray. “An LLC's building, and other depreciable property, would be ‘qualified property’ for purposes of the new test, as long as the LLC had not fully depreciated the property. That would be unlikely, as commercial real property is currently depreciated over 39 years.” IBT previously reported that 13 GOP lawmakers directly sculpting the bill —including U.S. House Speaker Paul Ryan — have between $36 million and $163 million worth of ownership stakes in real estate-related LLCs. Those entities generated between $2.6 million and $16 million in “pass through” income and could benefit from the new provision. Sen. Bob Corker, who was considered a potential “no” vote on the bill, abruptly switched his position upon the release of the final legislation. Federal records reviewed by IBT show that Corker has millions of dollars of ownership stakes in real-estate related LLCs that could also benefit. “Pass throughs” are business entities that don’t pay corporate income taxes, like partnerships, LLCs and S-Corporations. Instead, they “pass through” income to partners, who then pay personal income taxes on the money they receive. The Senate version of the tax bill would have added a 23 percent deduction for income from pass-throughs to the tax code. The new reconciled tax bill shrinks that deduction to 20 percent but, in a last minute change, added a new way around restrictions that would have kept pass-throughs with large income but few employees from benefiting. The new bill still has the same income provision but adds a loophole: depreciable property. So instead of being being able to get a large tax cut only if you pay a lot of wages, now you can get the tax cut if you own a lot of property. “If they were saying before Trump wouldn’t get this because his pass-through firms don’t have employees, that’s clearly no longer the case,” Kamin said. Congress is expected to vote on the final tax bill next week. |
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Re: The Newly Revised GOP Tax Plan |
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Posted by AlM on Mon Dec 18 13:09:56 2017, in response to The Newly Revised GOP Tax Plan, posted by Stephen Bauman on Mon Dec 18 12:47:57 2017. Sen. Bob Corker, who was considered a potential “no” vote on the bill, abruptly switched his position upon the release of the final legislation. Federal records reviewed by IBT show that Corker has millions of dollars of ownership stakes in real-estate related LLCs that could also benefit.Glad to see that Corker is upholding his principles. |
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Re: The Newly Revised GOP Tax Plan |
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Posted by Henry R32 #3730 on Mon Dec 18 21:11:26 2017, in response to Re: The Newly Revised GOP Tax Plan, posted by AlM on Mon Dec 18 13:09:56 2017. The provision, said experts, would offer a special tax cut to LLCs with few employees and large amounts of depreciable property assets, namely buildings: rent generating apartment and office buildings.Heh, so this might also stave off a rent hike for me. This plan keeps getting better and better (for me)! |
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Re: The Newly Revised GOP Tax Plan |
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Posted by bingbong on Mon Dec 18 23:32:36 2017, in response to Re: The Newly Revised GOP Tax Plan, posted by Henry R32 #3730 on Mon Dec 18 21:11:26 2017. I wouldn't get too excited. Much of these cuts expire. The deficits they create don't. You rent will go up eventually to cover their cost, probably by a large amount several years from now after this is long forgotten regardless of the fact that this will be the underlying cause. |
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Re: The Newly Revised GOP Tax Plan |
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Posted by AlM on Tue Dec 19 09:17:53 2017, in response to Re: The Newly Revised GOP Tax Plan, posted by Henry R32 #3730 on Mon Dec 18 21:11:26 2017. No, your rent is based on supply and demand. Supply won't change in the short term. Owning a home just got more expensive, so you will have more competing demand for your rental. The owner of your building will be able to increase your rent and get a tax break.In the long term more new construction will be rentals and the situation will tend to equalize. But by then it'll be 2026 and your tax break will be gone. And remember the mistake you made in your calculation. Your tax break is $1,000 less than you thought it was. |
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Re: The Newly Revised GOP Tax Plan |
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Posted by Spider-Pig on Tue Dec 19 11:05:38 2017, in response to Re: The Newly Revised GOP Tax Plan, posted by AlM on Tue Dec 19 09:17:53 2017. Henry subscribes to the right-wing delusion that prices are based on costs rather than demand. That’s what drives people to believe that if a business saves money, it will lower prices of what it sells out of the goodness of its proprietors’ heart rather than simply pocketing the savings. |
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Re: The Newly Revised GOP Tax Plan |
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Posted by bingbong on Tue Dec 19 11:57:16 2017, in response to Re: The Newly Revised GOP Tax Plan, posted by Spider-Pig on Tue Dec 19 11:05:38 2017. That's called reality-challenged. |
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Re: The Newly Revised GOP Tax Plan |
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Posted by AlM on Tue Dec 19 13:02:35 2017, in response to Re: The Newly Revised GOP Tax Plan, posted by Spider-Pig on Tue Dec 19 11:05:38 2017. Henry subscribes to the right-wing delusion that prices are based on costs rather than demand.Ha. I hadn't realized that was particularly a right wing delusion. I thought it was just ignorance of economics (which is both a right wing and left wing thing). |
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