Thursday
July 24, 2014

Take Long View on Tax Reform, Analyst Says

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Take Long View on Tax Reform, Analyst Says

Political analyst Stuart Rothenberg, editor and publisher of The Rothenberg Political Report, says REALTORS® should be prepared for a long battle to protect home ownership because of the uncertainty surrounding when, or even if, Congress will tackle tax reform.

“You’re wise to be preparing for the fight, but we don’t know exactly when the fight will take place,” Rothenberg told politically active REALTORS® in Washington for an orientation on federal issues impacting real estate. “This will be a long process.”

Rothenberg said a number of issues have quickly jumped to the top of Congress’ to-do list, making it hard to determine the likelihood of tax reform getting onto the agenda this year. These issues are gay rights, gun control, immigration reform, and reauthorization of No Child Left Behind education reforms.

On top of that, Congress just earlier this month took a bite at the tax apple with its fiscal cliff law, which, among other things, enshrines existing tax rates into law for 99 percent of all households, relieving some of the pressure to initiate a big tax discussion this year, he said. 

In any case, it’s a newly emboldened President Barack Obama who is driving much of the agenda right now, Rothenberg said. As unlikely as it would have seemed a year ago, immigration reform now has a strong likelihood of passage because both parties have an incentive to see action on it: Democrats because they would get a political win, and Republicans because they “want the issue off the table,” he said.

Whatever the President wants done, though, he must drive it through Congress within the next six months or so, because later this year the environment will turn highly politicized again as the focus turns to the 2014 elections. So, even though he’s in a newly strengthened position, with high poll numbers compared to Congress’ standing, his window of opportunity is narrow.

What’s more, should the economy hit a tough patch or a pressing foreign-policy issue take the fore, the window for Obama would shrink even more. “Things can change quickly,” he said. Obama could “lose steam and his poll numbers [could] drop again.”

— Robert Freedman, REALTOR® Magazine

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