Pass-Through Tax Cut Would Be Great for Real Estate

More than 95 percent of businesses in the U.S. are pass-throughs, with earnings going toward the owners' individual income tax returns. The proposed House and Senate tax plans both include tax cuts of around $450 billion over 10 years for those owners.

Pass-throughs include sole proprietorships, partnerships, S corporations and real estate investment trusts. Using Internal Revenue Service data, Bloomberg reports that the sector with the top industry share of overall net income in 2012 was real estate, rental and leasing at 22.1 percent. Construction had 4 percent industry share for all pass-throughs.

So pass-throughs are pretty ... different. When you cut corporate taxes, it appears that you are cutting taxes most of all for manufacturers. When you cut pass-through taxes, it appears that you are cutting taxes most of all for real estate developers and investors.

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