Bill Overview
Title: Renewing Investment in American Workers and Supply Chains Act
Description: This bill classifies nonresidential real property and residential rental property as 20-year property for depreciation purposes.
Sponsors: Sen. Braun, Mike [R-IN]
Target Audience
Population: Property owners around the world owning nonresidential and residential rental property
Estimated Size: 30000000
- The bill aims to classify nonresidential real property and residential rental property as 20-year property for depreciation purposes.
- Depreciation affects property owners as it determines tax liability and incentives for investment.
- Change in classification to 20-year property could potentially lower upfront tax deductions but increase deductions over the long term.
- Thus, property owners who hold nonresidential and residential rental property will directly experience tax impacts.
- Secondary effects might include changes in investment strategies, supply chains and minor adjustments for industries relying heavily on such properties.
Reasoning
- The policy targets property owners who will see a direct impact on their tax liabilities. The change in depreciation timelines could result in altered investment decisions, prioritization of long-term property ownership, or changes in rental economics.
- Due to budget limitations, not all affected property owners will experience substantial changes in wellbeing. High property value owners or corporate owners are likely to notice more significant impacts.
- Many average individuals owning smaller rental properties may see negligible changes in their overall financial wellbeing, due to the gradual nature of depreciation benefits.
- Given that a large segment of the population doesn't own properties directly affected by the policy, we include perspectives from individuals who are not directly impacted.
- It's also critical to consider the potential for long-term supply chain improvements and indirect economic benefits which a broader array of individuals might experience.
Simulated Interviews
Real Estate Investor (Dallas, TX)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- This policy will likely help me manage my tax liabilities in a more predictable way.
- Over the years, the depreciation benefits could significantly enhance my cash flow.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Software Engineer (Chicago, IL)
Age: 35 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 8/20
Statement of Opinion:
- I don't see a huge impact on my day-to-day life from this policy yet.
- Long-term it might help with the tax deductions, but my primary income isn't affected.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Corporate Executive (New York, NY)
Age: 60 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 4/20
Statement of Opinion:
- From a corporate viewpoint, altered depreciation could affect our investment strategy.
- Personally, the policy doesn't alter my retirement plans significantly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Freelancer (Miami, FL)
Age: 25 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 12/20
Statement of Opinion:
- I don’t own property so, to me, it just matters if rents increase.
- If landlords benefit from the policy, they might not hike rents as much.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Property Manager (San Francisco, CA)
Age: 50 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- This policy will change how we approach property maintenance and upgrades.
- We might see more operational savings spread over the years.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Entrepreneur (Boston, MA)
Age: 30 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 7/20
Statement of Opinion:
- As a small business owner, if property expenses lessen over time, it could enable expansion.
- It’s complex but feels beneficial in the long term.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Tech Startup Founder (Seattle, WA)
Age: 28 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 20.0 years
Commonness: 3/20
Statement of Opinion:
- Increased depreciation time can offset initial costs, enhancing predictability.
- Affects my strategies for long-term growth.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 10 | 8 |
| Year 20 | 10 | 8 |
Landlord (Houston, TX)
Age: 55 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 15.0 years
Commonness: 5/20
Statement of Opinion:
- This policy seems to be more beneficial for large-scale property owners.
- I expect moderate relief on taxes, hopefully stabilizing rents.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
College Professor (Phoenix, AZ)
Age: 47 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- I doubt this law has much effect on small-scale landlords like me.
- It's more relevant for bigger property owners.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 7 | 6 |
Construction Worker (Los Angeles, CA)
Age: 40 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- It might indirectly affect construction demand as developers reassess property investments.
- Not something impacting my daily earnings directly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Cost Estimates
Year 1: $1500000000 (Low: $1300000000, High: $1700000000)
Year 2: $1480000000 (Low: $1280000000, High: $1680000000)
Year 3: $1400000000 (Low: $1200000000, High: $1600000000)
Year 5: $1320000000 (Low: $1120000000, High: $1520000000)
Year 10: $1180000000 (Low: $980000000, High: $1380000000)
Year 100: $50000000 (Low: $40000000, High: $60000000)
Key Considerations
- The policy aims to support investment in American property markets and supply chains, impacting tax schedules for depreciation.
- The transition to 20-year depreciation introduces immediate cost adjustments while promising long-term savings benefits.
- A secondary effect could reshape investment strategies, altering the economic landscape over the long term.