Here are 3 changes in the tax code that the Obama Administration should consider to stimulate the Real Estate market.
1. Abolish the Passive Activity Loss Limitation rules, and instead allow Investors to write off all their real estate rental losses without restrictions.
2. Allow a 5 year depreciation rule on Residential rental property.
3. Allow a 15 year depreciation rule on Commercial rental property.
To stimulate small businesses, I think Congress should provide a relief from the Self-Employment taxes especially for small businesses who have to pay 15.3% self-employment taxes.
This tax should be graduated at say 7.5% for the first $50,000 in net profits and then incremently increase to 15.3% for say when net profit increases to over $100,000.
The 15.3% tax rate is considerable burden on small businesses.
I think one of the best tax strategies to immediately boost the US economy is to cut the social security taxes for self-employed taxpayers.
The immediate impact would be to stimulate small self-employed businesses by cutting one of the biggest tax burdens. This net profit from self-employed businesses is subject to the 15.3% self-employment taxes and by cutting this in half would do more to help the small businesses than any tax credits or tax rebates.
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