House Ways and Means Committee Continues Markup as Senate Returns
The House Ways and Means Committee, chaired by Rep. Richie Neal (D-MA), will continue its committee markup this week of provisions to be included in the estimated $3.5 trillion reconciliation legislation to be considered by the House. The committee is conducting the markup remotely, as the full House is not scheduled to return until next week. The Senate returns this week, and Senate Majority Leader Charles Schumer (D-NY) has tasked Senate Democratic committee chairs with having their reconciliation bill language ready by Sept. 15.
While specific legislative language has not been made available as of the beginning of this week, the emerging tax plan includes increasing the top ordinary income tax rate from 37% to 39.6% for higher-income earners (defined as individuals making more than $400,000 and families making more than $450,000 annually), and an increase in the capital gains tax rate from the current 20% to 25% for higher-income earners. Also included is an increase in the holding period for capital gains treatment for certain partnership “carried interests” (also known as “promotes”) from three to five years. The president’s proposal to restrict Section 1031 like-kind exchanges is not currently in the plan. Last week, NAIOP and a coalition of real estate associations sent a letter to the committee expressing support for continuation of Section 1031 and like-kind exchanges.
The emerging bill will be subject to revisions over the next several weeks as the individual provisions are negotiated in the House and Senate. NAIOP will continue to work with Congress as the legislation advances to ensure that policies supportive of the commercial real estate industry are pursued.