Senators have been asked to make recommendations on which of the tax expenditures they want retained by July 26. Sens. Max Baucus, D-Mont., and Orrin Hatch, R-Utah, the chairman and ranking member of the Senate Finance Committee, announced that tax reform legislation would be developed using a “blank slate” approach. All current tax expenditureswould be removed from the tax code and only added to any new tax legislation if the tax expenditure can be justified by helping to grow the economy, making the tax code fairer, or effectively promoting other important policy objectives.
“Real estate is the most widely-held category of assets that American families own, and for many Americans, the largest portion of their family’s net worth,” says Gary Thomas, president of the National Association of REALTORS®. “While NAR agrees that reform and revision to different portions of the individual tax code may be warranted, we remain committed to preserving the current law incentives for home ownership and real estate investment.”
“America’s tax code is broken,” stated a letter by the Senate Finance Committee. “The last major reform of the tax code was the Tax Reform Act of 1986, which is considered by many as the gold standard for tax reform. However, since then, the economy has changed dramatically and Congress has made more than 15,000 changes to the tax code. The result is a tax base riddled with exclusions, deductions and credits.”