Nearly 150 real estate professionals from 34 states Monday urged congressional Republicans to pass their tax reform package, saying it would “unleash economic growth, create jobs, and increase wages.”
In a letter addressed to House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell, the 146 signers buck their industry’s trade association with support for doubling the standard deduction and rescinding the state and local deduction, which they say largely benefits wealthy taxpayers.
“If passed, the GOP tax proposal would unleash economic growth, create jobs, and increase wages for American workers by dramatically cutting taxes on U.S. businesses, lowering and simplifying tax rates on all individuals, and eliminating special interest handouts,” reads the letter, organized and released by Heritage Action for America, the lobbying affiliate of The Heritage Foundation.
The signers say they especially support the Republican framework for overhauling the tax code because it would double the standard deduction and proposes to repeal the state and local tax deduction. The National Association of Realtors opposes that repeal.
President Donald Trump has made overhauling the tax code a top priority for Congress during his first year in office, and has used social media to communicate its importance.
All of this “Russia” talk right when the Republicans are making their big push for historic Tax Cuts Reform. Is this coincidental? NOT!
— Donald J. Trump (@realDonaldTrump) October 29, 2017
As usual, the ObamaCare premiums will be up (the Dems own it), but we will Repeal Replace and have great Healthcare soon after Tax Cuts!
— Donald J. Trump (@realDonaldTrump) October 29, 2017
The letter to Ryan and McConnell from the real estate professionals reads:
We specifically encourage you to keep the proposal to double the standard deduction and repeal the state and local tax (SALT) deduction. Contrary to what the National Association of Realtors (NAR) claim, doubling the standard deduction and repealing SALT does not increase taxes on homeowners and millions of middle class families.
Eliminating the state and local tax deduction would provide roughly $1.3 trillion in new revenue, Politico reported, but lawmakers from some high-tax congressional districts, such as in New York, say taxpayers count on the deduction and would have to pay more if Congress scraps it.
The state and local tax deduction allows taxpayers who itemize instead of taking the standard deduction to deduct from their federal taxable income any property and income taxes paid to state or local government, Adam Michel, a tax policy analyst at The Heritage Foundation, said in an email to The Daily Signal.
The deduction, Michel said, “allows state and local governments to impose excessive taxes on their residents, and shift part of the burden to federal taxpayers in other states.”
The Wall Street Journal reported Sunday that both the National Association of Realtors and the National Association of Home Builders are opposed to the Republican plan.
“It’s a bad bill for the housing sector,” Jerry Howard, CEO of the builders group, told the newspaper in an interview Saturday. “We will not be for it.”
The proposal is not yet in the form of a bill, but that language is expected later this week.
In a written statement provided to The Daily Signal, William E. Brown, president of the National Association of Realtors, said the current plan isn’t in the best interest of homeowners:
The vast majority of our 1.3 million members are in agreement that tax reform should first do no harm to homeowners. We are thrilled that as of today, over 100,000 Realtors® have already weighed in with their members of Congress to oppose the tax increase on middle class homeowners that would result if America’s homeownership incentives are taken off the table.
But signers of the letter, who include real estate brokers, real estate investors, real estate agents, and real estate attorneys, say that repealing the state and local deduction would help states allocate money more efficiently.
Doing so “would finally put pressure on fiscally irresponsible state and local politicians, specifically in California, New York and New Jersey, to lower their income and property taxes,” they write. “Why would a state like New York lower taxes if federal taxpayers continue to subsidize its out-of-control spending?”
Republicans’ tax reform framework—presented Sept. 27 by Ryan, McConnell, and other GOP leaders—would reduce the current seven tax brackets to three: 12 percent, 25 percent, and 35 percent.
The number of proposed brackets may increase to four, however. On Friday, Ryan said the tax plan will include a fourth bracket for high-income earners.
Signers of the letter also argue that passing tax reform will help stimulate the housing market:
It’s been far too long since Congress reformed our broken tax code and our economy has suffered as a result. According to the Tax Foundation, pro-growth tax reform has the potential to grow the economy by 10 percent over the next 10 years and increase the average American family’s wages by more than 7 percent or about $4,000 for someone earning $50,000 a year. This GOP tax proposal is a serious tax reform package that will grow the economy and help create a healthy and robust housing market.
Dan Holler, vice president of communications for Heritage Action, told The Daily Signal in an email that, done right, tax reform will help keep special interests from negatively influencing the housing market.
“Realtors and homebuilders across the country know the value of tax reform, and the worst thing that can happen now is for special interests to hijack the process,” Holler said:
There are too many associations in Washington making arguments about what’s good for their narrow slice of the economy, instead of taking a broad view of how tax reform will help all Americans. The Trump administration will not be able to drain the swamp or reform the tax code if lawmakers listen to these cronyist associations.
Source material can be found at this site.