The Real Estate Roundtable, a non-partisan group focusing on issues affecting our industry, has long maintained that all business investments, including real estate, be taxed on the economics of the investment. Tax incentives should be rare and limited to situations justified by market failures or societal goals. Capital investment by America’s businesses stimulate jobs and economic activity. Tax law allows, through depreciation and amortization, the recovery of capital investment costs. Just as airlines depreciate aircraft, technology companies amortize R&D, and manufacturers depreciate plants and equipment, real estate owners depreciate buildings. Buildings depreciate from wear and tear, and because they grow technologically and functionally obsolete. According to the Massachusetts Institute of Technology, buildings depreciate twice as fast as today’s tax law permits. In contrast, underlying land often appreciates, reflecting inflation and demographic trends. The economics of a business do not begin and end in a single calendar year. Sometimes businesses suffer losses that exceed income and, rather than say “tough luck,” the tax law allows losses to be carried forward to future tax years. Public corporations historically have the largest loss carry forwards. Like-kind exchanges that defer, not eliminate, taxation are used by small businesses, conservationists, farmers and ranchers and countless others. Properties across the nation, of all size, are involved in exchanges. There were 350,000 exchanges in 2013 alone. By avoiding a “lockup” of properties when credit is scarce, exchanges encourage job-creating property improvements and new investment. Today’s real estate industry is driven by sound economic and market fundamentals: local demand, rents and property valuations. Real estate’s contribution to the economy is vast. The industry employs millions of Americans and provides more than 60% of local tax revenue. Real estate is a backbone of planning for every private and public retirement system. Tax laws must be well-designed with a clear understanding of the consequences for all Americans.