Republican Sen Bob Corker of Tennessee, who came out against the GOP Tax Reform bill on Dec. 1, recently changed his mind after a provision to enrich real estate investors, like Corker, was added to the bill.
David Sirota, a journalist with the International Business Times, told Democracy Now explained how Corker’s vote flipped quickly:
So, when that bill came out, on Friday afternoon, the conference report with that special provision in it, all of a sudden Bob Corker said that he is now switching his vote from “no” to “yes” on the final bill. And this is a provision that could potentially, in a very serious way, enrich him. Economists have told us he could make between $500,000 and a million dollars in tax cuts from this bill, based on his own filings.
The New York Times explained how real estate investors such as Corker and President Donald Trump will personally benefit from the GOP’s $1.5 trillion tax cut:
Numerous industries will benefit from the Republican tax overhaul, but perhaps none as dramatically as the industry where Mr. Trump earned his riches: commercial real estate.
Mr. Trump, along with his son-in-law Jared Kushner, who is part owner of his own real estate firm, will benefit from lower taxes on so-called “pass through” income, which is money earned by partnerships and other types of businesses whose income is passed through to its owner and taxed at the individual tax rate.
Mr. Trump and Mr. Kushner benefit since they own properties through limited liability companies and other similar vehicles.
Under current law, that income is taxed at rates as high as 39.6 percent. Under the bill, much of that income could be taxed at a rate as low as 29.6 percent, subject to some limitations.
Real estate also avoided new limits on interest deductions and retained its ability to defer taxes on the exchange of similar kinds of properties. The benefits of lower rates on pass-through income will extend to Mr. Trump and Mr. Kushner’s partners at real estate investment trusts as well.
At the last minute, lawmakers added language to make it easier for real estate owners to avoid some of the pass-through provision’s restrictions and maximize the tax benefits even more.
The New York Times also explained how U.S. corporations will be rewarded for keeping their income off shores — to avoid paying taxes — for years:
Such multinational companies have accumulated nearly $3 trillion offshore, mostly in tax haven subsidiaries, untouched by the United States taxman. The tax bill will force those companies to gradually bring that money home, but it will be taxed at rates ranging from 8 percent to 15.5 percent. That’s far lower than the current 35 percent tax rate on corporate profits and even lower than the new 21 percent rate.
Plus, American companies will no longer owe full corporate taxes on future profits they say they earn abroad, providing more incentive to push income into tax haven subsidiaries. The law even includes provisions that could encourage companies to move workers abroad, despite pledges to do the opposite.