President Obama’s latest budget: A bad deal for real estate professionals
This month, President Obama released the 8th and final budget of his presidency. Unfortunately for realtors, his budget includes a number of proposals that if enacted, would do tremendous harm to the economy and to the real estate industry specifically.
To start, the President’s budget calls for an increase of federal spending to a grand total of $4.1 trillion dollars. To pay for the additional spending, the President proposes an astonishing $2.6 trillion in tax increases over the next ten years. These tax increases include raising the top capital gains tax rate to 28 percent, expanding the 3.8 percent net investment income tax in the Affordable Care Act to include real estate professionals, shifting the tax treatment of carried interest to higher ordinary income rates, along with imposing a $10-per-barrel tax on crude oil.
The President’s proposed taxes would harm realtors specifically by discouraging investment, entrepreneurial risk-taking, and increasing the cost of capital. They would severely hamper the commercial real estate market making it harder for realtors to earn a living.
The President’s proposed taxes would do harm to the economy at large, lowering the amount of take home pay Americans can use to save, invest, and buy real estate with. Every dollar taken by Washington, D.C. is less money Americans can put away to achieve their version of the American dream. Instead of increasing taxes, especially on Americans who want to save and invest in real estate, Congress should pass pro-growth tax reform that lowers rates for all Americans and ends the tax bias against savings and investment.