Koch Group Says Realtors Among Those ‘Jeopardizing’ Tax Overhaul

  • Group argues special breaks hurt prospects of tax legislation
  • Realtors’ lobby has opposed doubling standard deduction

Trump Says Tax Plan Will Give $4K Pay Raise to Families

A group backed by billionaire industrialists Charles and David Koch unveiled a television and digital campaign Wednesday that claims “corporate welfare” threatens Republican efforts to dramatically alter the U.S. tax code.

The Freedom Partners Chamber of Commerce is targeting the politically powerful National Association of Realtors for opposing a proposal by the White House and Republican lawmakers to double the standard deduction, as well as several entities that represent renewable and energy efficiency interests advocating other tax incentives. The groups are “jeopardizing tax reform,” the Koch-backed group said in a statement.

Charles Koch

Photographer: Bo Rader/Wichita Eagle/MCT via Getty Images

The effort is part of what the political network has described as a multimillion-dollar campaign to build public support for a streamlined federal tax system. In addition to paid advertising, the group has created a website it says will "spotlight efforts to promote and protect corporate welfare."

The website says "millions of dollars are being spent to mobilize an army of lobbyists in Washington to protect industry-specific carve outs not explicitly addressed" in the tax framework presented by President Donald Trump and Republicans. "If lawmakers cave to this pressure and start picking certain preferences to keep, it could jeopardize the entire effort," it says.

NAR is opposed to doubling the standard deduction because the group says it would reduce the value of the mortgage deduction, curbing the incentive to purchase a home and leading to a “a de facto tax increase on homeowners.”

White House advisers have said their tax framework would simplify the tax code and eliminate deductions and special breaks for the wealthy and well-connected. The plan, released Sept. 27, proposes the elimination of state and local tax deductions and personal dependent exemptions, cuts also opposed by the real estate association. The plan calls for keeping deductions for mortgage interest and charitable contributions.

David Koch

Photographer: Paul Zimmerman/WireImage via Getty Images

“Realtors support the overall goals of tax reform, including lower rates, if they can be achieved in a fiscally responsible manner," NAR President William E. Brown said in a statement. "What concerns us is the tax increase on millions of middle class homeowners that’s baked into the major proposals we’ve seen so far. We will continue to make the case that tax reform should first do no harm to homeowners.”

The Alliance to Save Energy, another group criticized by the Freedom Partners, defended its support of tax incentives.

“Encouraging energy efficiency is exactly what Congress should be doing with the tax code," Ben Evans, a vice president for government affairs and communications, said in a statement. "Energy efficiency has broad, bipartisan support from consumers and businesses alike, and we’re proud to be urging Congress to support it.”

The American Council on Renewable Energy said the Koch criticism lacks merit.

“It’s ironic that this group targets the renewable energy sector, when wind and solar power groups have already worked with Congress in support of a bipartisan phase-out of their own tax incentives, even as other energy sources have permanent subsidies that have been in place for more than 90 years," Greg Wetstone, the group’s president and CEO, said in a statement.

The cost of renewable energy tax credits is small compared with doubling the standard deduction. The Congressional Budget Office estimates "tax preferences" for renewable energy cost less than $10 billion annually, while the politically conservative Tax Foundation estimates the proposed change to the standard deduction would cost $1.3 trillion over 10 years.

The brothers own Koch Industries, a Wichita, Kansas-based conglomerate with interests ranging from oil and ranching to farming and the manufacturing of electrical components.

Freedom Partners, one of the Koch political network’s primary groups, said the advertising portion of the campaign would cost "six figures" and will be broadcast on cable and broadcast television in Washington.

“The unified vision the Trump administration and congressional leaders provides a once in a generation opportunity to un-rig the tax code of corporate welfare," said James Davis, a Freedom Partners executive vice president. "Americans deserve a tax code that puts their interests ahead of special interests, and shining a light on this process is the best way to ensure they get one.”

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