Well, there’s more controversy surrounding Donald Trump and the GOP tax bill and that’s not the best way to kick off a week that’s supposed to mark something a victory lap on a plan the administration is still trying to sell as a “middle class miracle.”
As we detailed in our week ahead preview, a provision was added at the last minute that allows for a tax deduction on pass-through income for real estate LLCs, including those with no employees. That would benefit Bob Corker which raises questions about whether there was quid pro quo involved with his decision to reverse course and support the plan on Friday afternoon.
The provision would also benefit Trump.
Corker told International Business Times that he did not know the provision was added. “Corker, the lone Republican to vote against the original Senate bill, which didn’t include the provision, also admitted he has not read the final tax bill he announced he will support,” IBT wrote over the weekend, adding that “a trio of Democratic Senators slammed the provision.”
Specifically, IBT notes that Corker made as much as $7 million last year from income that would be covered under the provision, while Trump’s financial disclosures show somewhere between $41 million and $68 million of the same income. Consider these excerpts from one of the original IBT articles on this:
“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.
Imagine that, right? But you know, this is all about the middle class – Steve Mnuchin promises.
Corker has now written a letter to Senate Finance Chairman Orrin Hatch requesting an “explanation of the evolution” of the provision and how it was included in final conference report.
“Beginning on page 25, line 3, there is a policy related to pass-through businesses and what is known as the alternative limitation on the deduction amount,” Corker writes, adding that “[a reporter called me] about the provision under suggestion was that it was airdropped into the conference.”
There’s obviously no telling who knew what about this “addition”, and really that’s not what matters. What matters is that this was inserted haphazardly and wouldn’t you know it, there are at least 13 GOP lawmakers who would cash in on it.
I guess my question for all the “working families” the GOP tax bill is supposed to help would be this: how many real estate LLCs do you have stakes in?
Meanwhile, Trump is up before dawn and this was his first tweet of the week:
I think that speaks for itself.
We’ll leave you with a slideshow that should give you an idea of how Americans view this tax plan:
