ICSC PAC hosted a breakfast on Capitol Hill on September 14 in conjunction with the ICSC Board of Trustees meeting. House Ways and Means Chair Kevin Brady (R-TX) was in attendance, as well as 20 other Congressional colleagues, including Ways and Means members Tom Reed (R-NY), Pat Meehan (R-PA), Brian Higgins (D-NY) and Suzan DelBene (D-WA). The breakfast provided an opportunity for members of Congress to discuss retail real estate’s interests and potential concerns with tax reform, including potential limits to the business interest deduction and the importance of carried interest, like-kind exchanges, and transition rules that prevent harm to existing investments.
On the other side of the Capitol, the Senate Finance Committee held a hearing on September 19 to examine business tax reform issues. Representing commercial real estate was Jeff DeBoer, president and CEO of The Real Estate Roundtable. Other groups testifying included the Tax Foundation, the Urban-Brookings Tax Policy Center, and the American Institute of Certified Public Accountants.
Regarding proposals to limit the deductibility of business interest, Deboer noted that “the ability to finance productive investment and entrepreneurial activity with borrowed capital has driven economic growth and job creation in the United States for generations. Limiting the deductibility of interest would increase the cost of capital, discouraging business formation and make it harder to grow into larger businesses.”
DeBoer also warned that Congress "should be wary of changes that result in short-term, artificial stimulus and a burst of real estate investment that is ultimately unsustainable and counterproductive. Real estate investment should be demand driven, not tax driven.”
ICSC Chairman Kenneth Bernstein (President & CEO, Acadia Realty Trust), Terry Montesi (CEO, Trademark Property Company), ICSC Past Chairman Drew Alexander (President & CEO, Weingarten Realty Investors), U.S. House Ways and Means Chair Kevin Brady (R-TX) and Gar Herring (President and CEO, The MGHerring Group).