Corker surprised by special tax cut for his commercial real estate business

The latest version of the federal tax bill that Congress is expected to approve this week includes a provision that U.S. Sen. Bob Corker says caught him by surprise. It’s a tax break that would benefit persons with large commercial real estate holdings – such as Corker – and the senator has asked for an explanation.

Excerpt from a letter the Tennessee Republican sent Senate Finance Committee Chairman Orrin Hatch, R-Utah, on Sunday, as reported by Bloomberg News.

“The suggestion was that it was airdropped into the conference without prior consideration by either the House or Senate,” Corker said in the letter.

“My understanding from talking to leadership staff today is that a version of this provision was always in the House bill — from the Ways & Means markup, through House floor consideration — and in reconciling the divergent House and Senate approaches to pass-through businesses this House approach stayed in the final conferenced version,” Corker wrote.

“Because this issue has raised concerns, I would ask that you provide an explanation of the evolution of this provision and how it made it into the final conference report,” Corker wrote to Hatch.

The “last-minute” provision was first reported by the International Business Times. Democrats immediately blasted the provision and Corker – who announced last week he would shift from a no vote to a yes vote on the bill — told IBT that he was unaware of it. Excerpt from the IBT report:

Corker’s vote is considered pivotal in the closely divided Senate and he could be in a position to make or break the landmark legislation. He declared his support for the final reconciled version of the bill on Friday after GOP lawmakers added a provision that could benefit his vast real estate holdings — a provision that Corker denied having any knowledge of.

In a series of rapid-fire telephone interviews, Corker asked IBT for a description of the provision, and then criticized it. But minutes later, he called back to walk back that criticism, saying he wanted to further study the issue, and that it was more complex than he initially understood it to be. Despite potentially holding the fate of the entire tax bill in his hands, Corker told IBT that he has only read a short summary of the $1.4 trillion legislation.

“I had like a two-page summary I went through with leadership,” said Corker. “I never saw the actual text.” Despite not reading the bill — and having time to read it before the final vote scheduled for this week — he reiterated his support for the bill to IBT, support he announced hours before bill’s full text was publicly released on Friday.

Corker called IBT to respond to a series of IBT investigative reports showing that he switched his vote to “yes” on the tax legislation, only after Republican leaders added in a provision reducing taxes on income from real-estate LLCs. Federal records reviewed by IBT show Corker, a commercial real estate mogul, made up to $7 million last year from such income. President Donald Trump’s financial disclosures listed between $41 million and $68 million of the same income.

Here’s the text of a Corker press release, including the full letter to Hatch:

CHATTANOOGA, Tenn. – Following false reports over the weekend about his involvement in the tax reform legislation, U.S. Senator Bob Corker (R-Tenn.) wrote to Senate Finance Committee Chairman Orrin Hatch (R-Utah) today seeking information about where the provision in question originated. The senator is not a member of the tax-writing committee and had no involvement in crafting the legislation. He requested no specific tax provisions throughout the monthslong debate and had no knowledge of the pass-through provision in question.

Text of the letter…

Dear Chairman Hatch:

I appreciate the fact that on Thursday, as the conferees were concluding their work and before the weekend began when Senate staffs and members were going through the tax bill in detail, that I was provided with a briefing on key provisions in the reconciled conference bill that were different than those of the Senate bill.

Yesterday afternoon, I received a call from a reporter asking about what he alleged to be a new provision in the legislation. The suggestion was that it was airdropped into the conference without prior consideration by either the House or the Senate. Since this issue has never been discussed with us by committee or Senate leadership, I went back through the bill in detail today.

Beginning on page 25, line 3, there is a policy related to pass-through businesses and what is known as the alternative limitation on the deduction amount. My understanding from talking to leadership staff today is that a version of this provision was always in the House bill—from the Ways & Means markup, through House floor consideration—and in reconciling the divergent House and Senate approaches to pass-through businesses this House approach stayed in the final conferenced version.

Because this issue has raised concerns, I would ask that that you provide an explanation of the evolution of this provision and how it made it into the final conference report. I think that because of many sensitivities, clarity on this issue is very important and hope that you will respond in an expeditious manner.

Thanks very much for your attention in this matter.

Sincerely,

Bob Corker

U.S. Senator

cc:

Chairman Kevin Brady

Leader Mitch McConnell

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