November 13, 2017

GOP tax plan preserves big cut for golf course owners like Trump

NY Mag - Donald Trump repeatedly promised that he would not benefit from his own tax plan. Congressional Republicans repeatedly pledged that they would finance a “middle-class tax cut” by closing “special interest” loopholes — especially those that benefit the affluent.

These were always transparent lies. From the beginning, it was clear that the GOP plan would deliver a windfall to the Trump family, through its abolition of the estate tax, a giant cut in the rate for pass-through companies (like the Trump Organization), and a massive reduction in the corporate tax rate (which will primarily benefit wealthy shareholders). Meanwhile, the Republicans never did much to conceal that their plan would deliver more benefits to their preferred special-interest groups than to the middle class.

Still, few could have anticipated just how gratuitously the Tax Cuts and Jobs Act violates the president’s promises to the American people. Pretending that corporate tax cuts produce huge wage gains for middle-class workers is one thing. But ending deductions that benefit veterans, indebted students, orphans, and people who suffer from rare diseases — while preserving one that benefits owners of golf courses — requires almost superhuman chutzpah.

At present, the tax code provides “conservation easements” to owners of land who agree to leave their property undeveloped. The point is to encourage the preservation of forests and farmland, for the public’s benefit. But owners of private golf resorts can also access this subsidy, by promising to “conserve” their fairways and putting greens in perpetuity.

This is an extremely inefficient means of conserving open, quasi-natural space. But it’s a highly efficient way of subsidizing millionaire developers. As Bloomberg explains:

[I]n practice, the deductions that land owners take for golf courses are enormous compared with the conservation value, said Ruth Madrigal, a tax lawyer who worked on conservation easements for the U.S. Treasury department during the Obama administration. A developer can build homes and a nearby golf course, get a conservation easement on the links and claim a deduction that can pay for the entire development, she said.

“The Obama administration wanted to cut the deduction because it viewed the policy’s costs in total as far exceeding the conservation benefits,” Madrigal said.

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