Proposed tax increase would create disincentive for investing in commercial real estate and potentially stifle economic growth.

Legislation supported by House Ways and Means Chairman Charlie Rangel (D-NY) would make major changes to the income tax rules affecting commercial real estate investments. This legislation would significantly impact commercial real estate projects, since the bill proposes a massive tax increase for real estate partnerships, raising the tax rate on "carried interest" from 15% to 35%.   

According to the CCIM Institute, this legislation is detrimental to the commercial real estate industry and to the economy in general for the following reasons:

• Drives investors to put their money elsewhere for more favorable tax treatment (such as stocks) instead of into commercial real estate.
• Diminishes the value of many real estate partnerships because the capital would not be there to facilitate them. Many commercial real estate partnerships would likely be put out of business.
• Creates a disincentive to investing in real estate since many would no longer earn a reasonable profit.
• Stifles growth in an important part of our economy.
• Punishes partners involved with prior arranged transactions by causing a totally different economic result than all partners agreed to in advance.
• Fails to recognize that real estate investors are involved in their investments daily, while hedge fund managers are not involved daily in their investments.

The CCIM Institute encourages you to contact your U.S. Senators and Representatives informing them of your concerns and urge them to oppose the carried interest provision. 

• Look up your Members of Congress and their contact information at  http://capwiz.com/cl/home.  You can write to all representatives online with one click from this website, or you can get their contact info here.
• Introduce yourself in a sentence or two.  For instance: I am a constituent and a commercial broker (or investor or concerned citizen) who…
• Use the bullets (above) on how higher taxes on carried interests would be detrimental to commercial real estate to argue your point. 
• Print your letter on your company letterhead if you will be mailing or faxing it to your legislators.  

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