Newspaper article The Christian Science Monitor

Where Clinton and Trump Stand on a Real Estate Tax Loophole

Newspaper article The Christian Science Monitor

Where Clinton and Trump Stand on a Real Estate Tax Loophole

Article excerpt

A new analysis of the tax policies proposed by the major-party presidential candidates finds that the two plans are worlds apart.

Republican presidential nominee Donald Trump's plan would decrease tax revenues by $6.2 trillion over a decade, cutting taxes among the top 0.1 percent of incomes by almost $1.1 million on average, according to an analysis by the Urban-Brookings Tax Policy Center, while Democratic presidential nominee Hillary Clinton's plan would raise revenue by $1.4 trillion, almost exclusively through new taxes on the wealthy.

"In almost every meaningful respect these plans are mirror images," said Len Burman, the center's director and former Treasury official under President Bill Clinton, in an interview with the Associated Press.

The candidates' tax policies may get extra attention this year, given Mr. Trump's refusal to release his own tax records, a practice that has been customary for presidential candidates from both parties since the 1970s. And in the second debate on Sunday night, Trump said he "absolutely" used a 1995 loss of more than $900 million - one uncovered by The New York Times after reporters obtained pages of the candidate's state tax returns - to avoid paying federal income taxes, as the newspaper suggested.

Mrs. Clinton's plan, it turns out, would close a loophole on one feature in tax-avoidance strategies of real estate investors like Trump.

Deductions stemming from losses can allow business owners to ride out tough times and encourage investment over the long run. But some can take advantage of loopholes to report losses that don't reflect the nature of their revenues.

That's especially true in real estate, where property owners can claim losses in wear and tear even as buildings increase in value. Or they can swap properties with other investors until they're sold farther down the line, meanwhile avoiding taxes on increases in value. Clinton's plan would cap these swaps to $1 million in assets per year.

As The Christian Science Monitor's noted earlier this month, Trump surrogates have sought to frame the candidate's apparent tax avoidance as proof of his canniness:

"He's a genius - absolute genius," [former New York Mayor Rudy] Giuliani said on ABC's "This Week. …

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