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Report: Senator Isakson stands to benefit financially from last-minute addition to tax plan

The new provision cuts taxes even more for him and other Senators who operate real-estate businesses, The International Business Time reports.

WASHINGTON D.C. -- A proposed tax cut bill could benefit a Georgia senator if it makes it to the president's desk.

The House of Representatives, on Tuesday, passed what is being called the most significant overhaul of the tax vote in three decades with a 227-to-203 vote earlier in the day. And the Senate passed their own early Wednesday morning.

Still, if the bill finally makes it to the Senate successfully, one feature added at the last minute benefits senators such as Georgia's Johnny Isakson, and anyone in the private sector who would qualify for the tax break.

The new provision cuts taxes even more for him and other senators who operate certain types of real estate businesses, The International Business Time reports.

The International Business Times has identified Senator Isakson and 13 other Senators who would potentially benefit personally and financially from the last-minute change.

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The change allows anyone who owns certain types of real estate businesses to get a tax break on their annual income from those businesses. That would include Isakson who, according to the Times's analysis of federal disclosure forms, last year claimed a personal income of up to $55,000 from his real estate businesses.

The Times also reported that Isakson was among the top recipients of campaign cash from the real estate industry. Click here to see that figure.

So, C.P.A. Chris Smith of CB Smith and Associates in Cumming says Isakson and others in that category will keep a lot more of their real estate income under the new law.

"They're allowed to take 20 percent of that income, and it's essentially tax-free," Smith said Tuesday. "The first 20 percent of that $55,000 [in Isakson's case] would not be subject to income tax. Essentially $11,000 of that 55 would not be subject to income tax. So he would stand to see some savings from that, as it relates to his vote on this particular tax bill."

Other senators have even bigger real estate holdings than Isakson, so they will benefit even more.

Smith said the idea is that owners of small businesses that have large real estate holdings end up contracting with, for example, property managers, and that creates jobs, indirectly. So the thinking is that those business owners should get the tax breaks, the same as other owners of small businesses.

"The rationale behind it seems reasonable," Smith said, "in terms of what they're trying to do. When you have an entity that has a lot of assets, it employs people."

Watch: Isakson on Senator floor urges support for tax cut bill

Isakson's support of the tax cut bill was locked-in long before the new provision about real estate income taxes was added, but the change does help him and others--in government and in the private sector--who own certain real-estate businesses.

And late Tuesday afternoon, a spokesperson for Isakson emailed 11Alive News, pointing out that the real estate provision was the result of years of work in both the House and Senate, and had broad support, and didn't just come out of nowhere:

"In the Senate Finance Committee’s tax reform framework announced early this fall after years of work, and in both the U.S. House and U.S. Senate versions of the tax reform legislation, [the bill] provided relief for “C” corporations and delivered equitable treatment for pass-through businesses. There were substantial differences between the structure of the House and Senate pass-through provisions. The House bill offered significantly more tax relief than the Senate bill for investors in pass-throughs that are capital-intensive rather than labor-intensive, such as real estate. The provision in the conference report represents a compromise between the two bills, and assertions that this is a new provision that was somehow “airdropped” into the conference are simply false."

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