Sen. Bob Corker (R-TN) on Friday switched his “no” vote on the GOP’s tax bill to a “yes” — and new reporting shows it could be related to additions that will benefit his businesses.
As International Business Times reports, Corker “abruptly switched his position” when the latest draft of the bill was released. Analysts that spoke with the IB Times analysts said the latest language in the controversial bill “would specifically allow owners of large real estate holdings through LLCs to deduct a percentage of their ‘pass through’ income from their taxes,” a move that would “personally” enrich real estate LLC owners.
“Corker has millions of dollars of ownership stakes in real-estate related LLCs that could also benefit,” federal records reviewed by IBT show.
The report explains that “pass throughs” are “business entities that don’t pay corporate income taxes.” Instead, they “‘pass through’ income to partners, who then pay personal income taxes on the money they receive.”
The Senate’s reconciled bill has a 20 percent deduction for pass throughs, and in a last-minute change, also “added a new way around restrictions that would have kept pass throughs with large income but few employees from benefiting.”
The loophole is based around “depreciable property,” meaning it provides tax cuts not only to people who pay a lot in wages to employees, but also to those who “own a lot of property,” IBT’s report explains.
The report notes that along with Corker, many of the bill’s supporters and architects, including House Speaker Paul Ryan (R-WI) and President Donald Trump himself own millions in real estate LLCs.
“This helps people who have held property for awhile, like Donald Trump,”David Kamin, a New York University law professor and former economic aide to President Barack Obama, told IBT. “If you’ve got an LLC that’s a trade or business with a bunch of real estate holdings and few employees, [I] think you’re now golden. You get the deduction.”