Tax Reform

Congress continues to eye tax reform as a priority issue. And while it’s unlikely that comprehensive tax reform will be enacted over the next two years, advocates are expected to maintain a steady drumbeat in favor of broad reform. Their argument: tax reform is essential to restoring US competitiveness abroad, encouraging economic growth at home, and making for a fairer, simpler tax system.

Crafting legislation is difficult in and of itself, but the current political reality creates an even greater roadblock to broad-based reform. A looming 2016 presidential election, the rules of the Senate and a divided government all present hurdles to action. And while there’s a limited chance that the freshly-minted Republican-controlled Congress will use the budget reconciliation process to move forward with comprehensive reform, there is a slightly better chance that elements of business-only tax reform could find their way into the budget process

In the beginning days of the 114th Congress, Senate Finance Chairman Orrin Hatch (R-Utah) established five tax reform working groups to address individual income tax, business income tax, savings and investment, international tax and community development and infrastructure. These working groups are roughly similar to the House Ways and Means working groups that operated during the 113th Congress. NAREIT has long supported Congressional efforts to review and improve the tax code and will remain actively engaged with policymakers to address any potential implications for REITs and real estate investment generally.

STATUS: Legislation has yet to be introduced.


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