Obama Jobs Bill Tax Increases – Carried Interest From 15% to 35%

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This has become an annual legislative fight since the Democrats regained control of congress in 2007.  Just the uncertainly alone casts serious doubts and further delays the commercial real estate recovery.   This is not a matter of nudging a rate two or three percent, but instead from 15% to 35% on the carried interest portion of real estate partnership earnings.  

Each time the proposed legislation has been beaten back by time consuming and expensive coordinated opposition from commercial real estate and mortgage groups claiming that higher taxes on carried interest will discourage real estate ventures from investing in projects that create jobs and economic prosperity.  

The groups, ranging from The Real Estate Roundtable, International Council of Shopping Centers (ICSC) and Building Owners and Managers Association (BOMA) International to NAIOP, the American Hotel & Lodging Association and the Mortgage Bankers Association, said in late July that a tax increase could “derail a real estate recovery by disproportionately impacting small- to medium-sized real estate partnerships that rely on carried interest to make up for the substantial risks and liabilities associated with long-term real estate ownership and development.”

The groups labeled carried-interest proposals a “job-killing tax hike” that would more than double the tax on all carried-interest income, cripple real estate job creation and investment across the country, and fundamentally change over 60 years of partnership tax law.”

CoStar News – Real Estate Groups Mobilize to Fight Hike in Carried Interest Tax