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REALTORS' RESPONSE TO CLINTON'S ECONOMIC STIMULUS PLAN: TAXES

 ORLANDO, Fla., April 7 /PRNewswire/ -- The National Association of Realtors (NAR) has reviewed key proposals in the Clinton economic plan that affect the real estate industry. These proposals were formally presented to Congress March 23. The review process is expected to take several months.
 "Florida's Realtors support President Clinton's efforts to reform taxes in order to make the government more efficient. We also encourage the government to pursue fair taxes for small businesses," commented Dale G. Jundt, president of the Florida Association of Realtors (FAR).
 As reported in Realtor News, an NAR publication, the following is a summary of Clinton's plan for taxes and the realtor response to proposals.
 Passive loss reform
 Clinton plan: The president proposed changing the current passive loss tax law so that all individuals who spend at least 50 percent of their time in the real estate business would be allowed to deduct their rental property losses against their real estate business income.
 Realtor position: Realtors support passive tax reform. We believe the current passive loss tax law is unfair because it restricts some real estate professionals from deducting their rental property losses from their real estate business income, while other busp?rofessionals are perm itted to deduct business losses from their income.
 Capital gains addressed
 Clinton plan: The president's proposal to raise the top tax rate for ordinary income would, in effect, create a capital gains tax rate differential for those in the president's proposed 36 percent and 39.5 percent tax brackets. A small differential already exists for those in the current 31 percent tax bracket. The capital gains tax rate would remain at 28 percent.
 Realtor position: Realtors support a cut in the capital gains tax rate -- either directly or indirectly. Such a cut would stimulate the sale of investment real estate and, therefore, the national economy.
 Help with health costs
 Clinton plan: The president proposed reinstating the deduction self-employed taxpayers may take for 25 percent of their health insurance premiums and extending it through Dec. 31, 1993. The deduction expired June 30, 1992.
 Realtor position: Realtors support reinstating the deduction, increasing it to 100 percent and extending it permanently. We believe increasing the deduction to 100 percent is fair because corporations are permitted to deduct 100 percent of their cost of providing health insurance to their employees.
 Depreciation life grows
 Clinton plan: Depreciable life of non-residential real estate would be extended from 31.5 to 36 years to raise additional federal tax revenue. The period of time over which residential real estate may be depreciated for federal tax purposes would remain at 27.5 years.
 Realtor position: Because this change in depreciation is the method Clinton proposes for raising money to offset the cost to the federal government of NAR-sought passive loss tax law reform, the realtor organization does not actively oppose this provision in the Clinton plan.
 -0- 4/7/93
 /NOTE TO EDITOR: This is the second summary in a series of three addressing aspects of Clinton's economic plan from the realtor point of view. Our first report covered housing; analysis of Clinton's proposals for credit will follow.
 CONTACT: Jeff Zipper, vice president of communications of the Florida Association of Realtors, 407-438-1400, ext. 2314/


CO: Florida Association of Realtors ST: Florida IN: SU: ECO

JB-AW -- FL007 -- 3888 04/07/93 16:06 EDT
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Publication:PR Newswire
Date:Apr 7, 1993
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