For many of us that are involved in professional real estate designations (CCIM, CRB, SIOR, CRS, etc.), we’ve spent countless hours studying, networking and differentiating ourselves from the pack in order to better represent ourselves and our clients. Among the benefits is being alerted to the fact that someone in Washington is making a move that will impact our clients, their businesses and our livelihood without the aid of the WSJ, CNBC or the mainstream media’s focus on its impact to our profession. Below is an alert I received this evening that I wanted to pass along to the BHB:
CCIM INSTITUTE CALL TO ACTION: OPPOSE TAX INCREASE ON COMMERCIAL REAL ESTATE
House Ways and Means Chairman Charlie Rangel (D-NY) is moving forward with legislation that would make major changes to the tax structure. The bill proposes a massive tax increase for real estate partnerships, raising the tax rate on “carried interest” from 15% to 35%. This legislation would significantly impact commercial real estate projects, most of which are organized in partnerships. Why this legislation is detrimental to real estate practitioners:
- Drives investors to put their money elsewhere such as stocks with much more favorable tax treatment;
- Diminishes the value and/or put many partnership out of business because the capital would not be there to facilitate them;
- Creates a disincentive to investing in real estate since many would no longer earn a reasonable profit;
- Stifles growth in a part of our economy which has become increasingly important over the last several years due to manufacturing, call centers, and other key industries moving offshore;
- Punishes partners involved with prior arranged transactions by causing a totally different economic result than all partners agreed with in advance; and,
- Fails to recognize that real estate investors are involved in their investments daily, while hedge fund managers are not involved daily in their investments.
Contact your U.S. Senators and Representative informing them of your concerns and urge them to oppose the carried interest provision. How to contact your legislators:
- Look up your Members of Congress and their contact information;
- Introduce yourself in a sentence or two. For instance: “I am a constituent and a commercial broker who…”;
- Use the bullets (above) on how higher taxes on carried interests would be detrimental to commercial real estate to argue your point. You are encouraged to add your own examples; and,
- If you will be faxing your legislators, print your letter on your company letterhead.
After contacting your legislators, please notify the CCIM Institute Legislative Liaison, Vijay Yadlapati. For more information on the issue read the CCIM Institute Statement of Policy on Carried Interests.
Make your voices heard! Act immediately by contacting your legislators.