John Cornyn, the second-ranking Republican in the Senate, was pushed by newsmakers on Sunday to explain a measure in the final GOP tax bill that could benefit those with real estate income.

The provision allows for a tax deduction on income made from “pass-through” entities, like real estate LLCs, including those with few or no employees. It could thus benefit Sen. Bob Corker, R-Tenn., and President Donald Trump, who both have real estate income.

According to the website Open Secrets, Trump owns corporations operating as LLCs.

Pass-through entities are businesses structured so that profits “pass through” to their owners before being subject to the corporate tax. The owners then report that profit as their personal income, and pay individual tax on it. Such companies can be small businesses, S corporations or LLCs.

With the new language, even companies with no employees can deduct a percentage of “pass-through income,” thereby lowering the rate they pay.

As first reported on by the International Business Times, Corker originally voted against the tax bill, but then supported it after the provision was added. He told IBT in an interview he only read a summary of the bill.

On Monday, Sen. Orrin Hatch — the head of the Senate’s tax-writing committee — denied the implication in news reports that Republicans added the measure at the last minute to win Corker’s vote. In a letter to Corker, the Utah Republican wrote that the provision was included in the House tax bill and said Corker did not personally advocate for it.

Corker’s office said the senator “requested no specific tax provisions throughout the monthslong debate and had no knowledge of the pass-through provision in question.”

Corker had asked Hatch for clarification regarding the provision.

Cornyn, who appeared on ABC’s “This Week” was asked by George Stephanopoulos about the pass-through measure.

“It was a very intense process. As I said, the Democrats refused to participate. And what we’ve tried to do is cobble together the votes we needed to get this bill passed,” Cornyn said.

Stephanopoulos asked if the language was added to benefit Corker.

“Well, the particular provision you’re talking about, honestly, is just one piece of a 1,000-page bill which is going to grow the American economy,” Cornyn said.

Lindsay Walters, White House deputy press secretary said in an email, “The President’s goal in tax reform was to create a bill that gives middle income families a big tax cut and stimulates economic growth so they can continue to feel that relief for years to come.”

Correction: This story has been updated to reflect that Sen. Orrin Hatch says the provision in the final GOP tax plan was part of the House bill and that Sen. Bob Corker did not ask for the provision to be included in the final bill.



Source link