- BUDGET & DEFICIT REDUCTION – “Super Committee” Hears Testimony on Bipartisan Debt Reduction Proposals as Nov. 23 Deadline Fast Approaches
- ONLINE SALES TAX – Coalition Urges “Super Committee” to Include a Provision Closing Online Sales Tax Loophole in Final Budget Recommendation to Congress
- ENERGY EFFICIENCY – Real Estate, Energy and Environmental Coalition Launches Website Focusing on Building Retrofits and Job Creation
- GOVERNMENT TRAVEL POLICY, TOURISM VISAS AND ECONOMIC GROWTH – Roundtable Addresses Federal Policies That Inhibit Real Estate Hospitality Sector’s Key Economic Role
“Super Committee” Hears Testimony on Bipartisan Debt Reduction Proposals As Nov. 23 Deadline Fast Approaches
As the Nov. 23 deadline looms for the deficit “super committee” to pinpoint at least $1.2 trillion over 10 years in federal budget savings for Congress to consider, authors of two prominent bipartisan debt reduction plans testified on Tuesday before the committee, encouraging both political sides to compromise amid doubts they can do so. (USA Today, Nov. 1) If the 12-member committee does not reach any agreement, it would trigger “sequestration” – across-the-board budget cuts in domestic discretionary programs and defense spending.
Former White House Chief of Staff Erskine Bowles, left, and former Sen. Alan Simpson (R-WY) led President Obama’s fiscal commission last year.
The architects of the previous debt reduction plans – former Sen. Alan Simpson (R-WY) and former White House Chief of Staff Erskine Bowles (who led President Obama’s fiscal commission last year) – along with former Office of Management and Budget (OMB) Director Alice Rivlin and former Sen. Pete Domenici (R-NM) – testified amid reports that the ideological divide over the role of revenue in deficit reduction has not essentially changed since the summer’s debt limit debate. (CQ Today, Nov. 2)
“I have great respect for each of you individually, but collectively, I’m worried you’re going to fail — fail the country,” testified former Clinton chief of staff Erskine Bowles, who also outlined a new $2.6 trillion solution that attempts to split the difference between rival Republican and Democratic plans.
The Roundtable has closely monitored the super committee’s deliberations over the last month for any potential proposal that could include corporate tax reform, pass-through entities or carried interest. “Partnership taxation, including carried interest taxation, should be debated in the context of overall tax reform – not decided in a closed door discussion about deficits,” said Roundtable President and CEO Jeffrey DeBoer.
In an Oct. 18 letter to the co-chairs of the bipartisan, bicameral committee, a group of 18 national real estate organizations, urged the panel to reject any calls for a tax hike on partnership “carried interest.” The industry letter sought to correct a number of misperceptions regarding carried interest — a common investment model that, among other things, helps ensure alignment of interests among the general and limited partners in a partnership.
The Oct. 18, 2011 industry letter to the super committee on carried interest.
“In fact, the tax increase would squarely hit commercial real estate, since 46% of all investment partnerships in America are real estate and the vast majority of them use a carried interest structure,” stated the letter, which included The Real Estate Roundtable as a signatory.
In addition to hurting job creation “at a time when the economy is still struggling under the weight of a 9.1 percent unemployment rate,” the letter noted that proposals to treat carried interest as ordinary income (instead of capital gain) would limit future economic development projects and associated tax revenues collected by local governments, whose budgets are already hard hit by the erosion of residential and commercial property values.
The day after the Simpson-Bowles and Rivlin-Domenici testimony, a bipartisan group of 100 House lawmakers sent a letter to the super committee calling for a $4 trillion deficit reduction compromise plan that would include revenues and cuts to entitlement and discretionary spending. The Nov. 3 letter from 40 House Republicans and 60 Democrats did not outline any specifics or mention the word “tax.”
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Coalition Urges “Super Committee” to Include a Provision Closing Online Sales Tax Loophole in Final Budget Recommendation to Congress
A coalition of more than 120 businesses, trade associations, and shopping center owners led by The International Council of Shopping Centers (ICSC) on Wednesday urged the Joint Select Committee on Deficit Reduction (“super committee”) to include an e-fairness provision in their final budget recommendations to Congress, which would close an online sales tax loophole that gives online retailers a competitive advantage over brick and mortar businesses. The Real Estate Roundtable is a member of the coalition.
The International Council of Shopping Centers (ICSC) has released anonline video about the internet sales tax fairness issue.
The Nov. 2 coalition letter to Sen. Patty Murray (D-WA) and Rep. Jeb Hensarling (R-TX) – co-chairs of the super committee – calls for Congress to give states the authority to collect the sales tax from online retailers, while also granting states flexibility in crafting their collections systems to conform with tax laws.
“It is no longer acceptable for Congress to allow internet retailers a huge sales tax subsidy,” says Roundtable Board Member and ICSC Chairman David Henry (president and CEO, Kimco Realty Corporation) in an ICSC video on the sales tax fairness issue. He adds, “… a sale is a sale, no matter where it takes place. Back in 1992, the last time the issue of sales tax collection was challenged at the federal level, Amazon and eBay did not exist and internet access in the American household was minimal. Since current sales tax laws already require consumers to pay taxes on all purchases, this is a tax collection issue – not a new tax of any kind.”
During The Roundtable’s Fall Meeting in Washington last month, Henry also engaged White House Chief of Staff William M. Daley over the issue of whether online retailers should be compelled to collect state sales taxes on Internet purchases.
Several bills are pending in the House and Senate that would give states authority to collect approximately $23 billion in uncollected state sales taxes currently due on Internet and catalogue sales. The Nov. 2 coalition outlines these legislative efforts, including two bills that would encourage states to set up a simple, fair system to collect sales taxes on remote sales, but only if the state decides to participate:
The Nov. 2 coalition letter to Sen. Patty Murray (D-WA) and Rep. Jeb Hensarling (R-TX) – co-chairs of the super committee.
• In July, The Main Street Fairness Act was introduced by Senator Richard Durbin (D-IL) as S. 1452 and Rep. John Conyers Jr. (D-MI) as H.R. 2701. The bill would provide anoption for every state to simplify its sales tax statute, assist vendors with compliance and provide a robust small business exemption.
• In October, The Marketplace Equity Act was introduced by Reps. Steve Womack (R-AR) and Jackie Speier (D-CA) as H.R. 3179. This bill would sanction a 24-state compact called the Streamlined Sales and Use Tax Agreement, providing states with authority to require collection on remote sales.
• Currently, Senate Majority Whip Dick Durbin (D-IL) is working on a bi-partisan solution to the online sales tax issue with Senators Michael Enzi (R-WY) and Lamar Alexander (R-TN) called The Marketplace Fairness Act, which may be introduced before the Thanksgiving break. (Roll Call, Nov. 2)
While acknowledging these legislative efforts in both the House and Senate, the coalition letter emphasizes that the super committee has a unique opportunity “to help the states resolve their own budget shortfalls by enhancing states’ rights over sales tax collection authority and in the process closing a loophole that will level the playing field for all merchants” in their final report due Nov. 23 to Congress.
The letter concludes that the super committee “… can easily include this authority in its recommendations to the full House and Senate, and we urge you to do so.”
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Real Estate, Energy and Environmental Coalition Launches Website Focusing on Building Retrofits and Job Creation
A broad spectrum of real estate, business, lending, manufacturing, environmental and energy efficiency organizations led by The Real Estate Roundtable, U.S. Green Building Council and the Natural Resources Defense Council havelaunched a joint initiative focused on energy efficiency policies and job creation. Utilizing their website launched this week, the “Coalition for Better Buildings” initiative focuses on public policy issues that can spark employment in the hard-hit construction sector while reducing energy consumption.
The coalition website includes links to a variety of energy efficiency news items, including an analysis that finds more than 114,000 well-paying, domestic jobs can be created with modest federal incentives. The report shows how financial and other incentives to improve energy efficiency in the nation’s commercial and multifamily buildings stock would have a ripple effect throughout the economy, generating new manufacturing, production and service jobs. It also demonstrates how public funds can leverage far greater amounts of private investment to retrofit commercial and large multifamily buildings. (Roundtable Weekly, June 17)
“Public policies that encourage energy efficiency in buildings and create jobs make perfect sense in our uncertain economic climate,” said Jeffrey D. DeBoer, president and CEO of The Real Estate Roundtable.
“Public policies that encourage energy efficiency in buildings and create jobs make perfect sense in our uncertain economic climate,” said Jeffrey D. DeBoer, president and CEO of The Real Estate Roundtable. “This diverse coalition of industries has come together to work with Congress and the Obama administration on common-sense business practices that will produce real results – jobs, economic growth and incentives for businesses across the nation to take on new retrofit projects.”
David Goldstein, Co-Director of the Natural Resources Defense Council’s Energy Program, added, “America could save more than 30 percent of projected energy use over the next 20 years using off-the-shelf building efficiency technologies that are widely available today. Cutting energy usage means cutting harmful pollution from power plants while saving money for building owners and businesses — money that can be injected back into our economy to buy goods and services and create even more jobs.”
U.S. Green Building Council President, CEO and Founding Chair Rick Fedrizzi noted that “When building stakeholders and environmentalists stand together with one unified voice, decision makers in Washington D.C. take notice. We look forward to working with policy makers on initiatives that will create an estimated 114,000 jobs that support the building industry and slash wasted energy.”
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Roundtable Addresses Federal Policies That Inhibit Real Estate Hospitality Sector’s Key Economic Role
The Roundtable on Tuesday sent a letter to White House Senior Advisor Valerie Jarrett expressing concernsabout an expected Executive Order (EO) from President Obama that would place severe restrictions on federal employee travel for conferences and other business-related functions. By initiating a “local first” policy on government travel, such an EO would instruct federal agencies to make “all appropriate efforts” to limit their employees’ job-related travel.
The Roundtable sent aletter to White House Senior Advisor Valerie Jarrett expressing concerns on Nov. 1 about an expected Executive Order (EO) from President Obama that would place severe restrictions on federal employee travel for conferences and other business-related functions.
Roundtable President and CEO Jeffrey DeBoer states in the letter, “As the hospitality sector of the real estate industry struggles to achieve economic recovery, the anticipated EO will unduly harm the travel industry and dampen job creation.”
The letter also notes the travel and tourism industry is a key economic contributor and an important source of employment. The U.S. Travel Association’s most recent sentiment index reflects increased pessimism regarding “interest in travel,” which reached its lowest point in three years. As the holiday shopping season approaches, The Roundtable’s letter expressed the concerns of the hospitality real estate sector that the order under consideration could “sound an anti-travel message.”
Measures to limit federal employee travel would contradict a report released last month by the President’s Council on Jobs and Competitiveness. (Roundtable Weekly, Oct. 14). The Jobs Council recognized that non-immigrant tourist visa procedures and long wait times must be improved to encourage tourists and business travelers from growing markets like China, India and Brazil to come to the United States – which could add up to as much as $390 billion in international visitor spending in the United States and create 1.3 million domestic jobs. The Roundtable last summer sent letters to President Obama and Secretary of State Hillary Rodham Clinton [Roundtable Weekly, Sept. 9] addressing this issue.
Awareness of the importance to attract more global travelers to the U.S. as a means to spur spending and create jobs was highlighted in a “Made in America” this week on ABC’s World News with Diane Sawyer.
As The Roundtable explained to Ms. Jarrett in the Nov. 1 letter, any effort by the Obama Administration to limit federal employee travel abroad and at home contradicts the Jobs Council’s message to encourage more travelers to come to our shores. By the end of the week, White House had not issued the “local first” Executive Order in final form, and The Roundtable will continue to monitor the issue.
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Source: The Real Estate Roundtable