Bernie Sanders isn’t wasting any time. Within days of the reveal that Donald Trump may have utilized tax breaks to not pay any taxes for almost 20 years, Senator Sanders announced new legislation to fix our rigged tax system.
The proposed bill, if passed, would close all of the tax loopholes that Trump exploited in his 1995 tax returns. These loops holes do nothing to boost the economy, but continue to allow real estate investors like Trump to get out of paying millions of dollars in taxes. Specifically, Trump used the debt and depreciation loophole, allowing investors to get tax breaks to make up for the money they lost in bad investments.
Sanders will introduce the bill in the 115th Congress, which begins next year.
“Special tax breaks and loopholes in a corrupt tax code enable billionaires and powerful corporations to avoid paying their fair share of taxes while sticking the burden on the middle class,” Sanders said. “It’s time to create a tax system which is fair and which asks the wealthy and powerful to start paying their fair share of taxes.”
Sanders’ legislation would close the following loopholes:
Exemption for the real estate from passive loss rules (Section 469): This loophole allows for an exception for real estate so that real estate investors can use losses to offset any other income, regardless of if it has to do with their business.
Exemption for real estate from at-risk rules (Section 465): An exemption for real estate investors that allows them to claim losses exceeding what they actually invested.
Like-kind exchanges (Section 1031): Allows real estate owners to swap pieces of property of the same type in order to claim they have no gain to report to the IRS because technically there was no sale.
Debt and Depreciation: Allows for investors to combine tax breaks for borrowing with tax breaks when an investment rapidly loses value, allowing them to borrow money to make an investment, take deductions for the interest they pay on the debt and then take deductions as the property depreciates.
You can read the full fact sheet on Sanders’ tax loophole closures here.