at a packed congressional hearing in late 1991, donald trump painted a bleak picture of the downtrodden real-estate industry<u+2014>including his own business<u+2014>as he begged lawmakers for help. <u+201c>there<u+2019>s an expression that we<u+2019>re using<u+2014><u+2018>survive <u+2019>til <u+2019>95,<u+2019> <u+201d> when the market might begin to turn around, the republican presidential nominee told lawmakers at the time. he urged congress to adopt new tax measures to boost the sluggish industry, adding, <u+201c>you have to get something going. if it<u+2019>s not started soon, we<u+2019>re just going to be in a free fall.<u+201d> it took congress another year and a half, but some of mr. trump<u+2019>s wishes eventually came true<u+00a0>as part of a loosening of federal tax rules that was highly friendly to the real-estate industry. several people who participated in the early 1990s debate in congress said that mr. trump<u+2019>s high-profile push for changes had only a minimal role in shaping the legislation.<u+00a0>real-estate trade groups were prominent in lobbying for the breaks. still, some observers are now wondering whether tax provisions adopted by congress in 1993<u+00a0>enhanced<u+00a0>mr. trump<u+2019>s ability to claim an extraordinary $916 million in<u+00a0>losses on his 1995 tax returns , as was revealed this past weekend. <u+201c>trump is exactly the type of business taxpayer<u+201d> that the 1993 amendments were intended to help, said martin mcmahon jr., a university of florida tax law professor. both mr. trump<u+2019>s businesses and he personally <u+201c>clearly could benefit from these rules,<u+201d> mr. mcmahon added. whether mr. trump relied on benefits stemming from the 1993 changes isn<u+2019>t clear, but in defending his 1995 returns this week, he said he had been <u+201c>a big beneficiary<u+201d> of the tax laws, which he criticized as overly complex and unfair.<u+00a0>he didn<u+2019>t provide specifics. trump spokeswoman hope hicks said thursday the changes were sought by a broad coalition of the real-estate industry. at the 1991 hearing, mr. trump urged lawmakers in particular to roll back the strict limits they had imposed on taking tax losses for some <u+201c>passive<u+201d> real-estate investments. those rules were preventing even full-time developers from using losses on their leased buildings in some circumstances. congress in 1993 did indeed roll back those limits, at least for real-estate professionals, though it didn<u+2019>t go as far as mr. trump suggested. the limits had been adopted in a landmark 1986 tax overhaul, as a way to curb then-rampant tax shelters, in which wealthy investors were receiving outsize losses to offset their income. mr. trump blamed the 1986 act for pulling the rug out from under the real-estate sector and helping to trigger the savings-and-loan crisis, as well as the industry downturn. lawmakers in the 1993 legislation also gave beaten-down real-estate investors additional ability to take large losses from leveraged property, without suffering a penalty, because the loans had been written off or renegotiated. mr. trump<u+2019>s push for changes<u+00a0>became the face of the debate for a time during the early 1990s. when then-president george h.w. bush proposed loosening the passive-loss rules in his 1992 state of the union address, congressional democrats quickly pounced. according to news accounts, congressional democrats ran a television ad in early 1992 that showed a tipsy trump look-alike at a party who finally drops his champagne glass to the floor, where it shatters. <u+201c>in the 1980s, republicans threw a big party. only the rich were invited,<u+201d> the ad said. <u+201c>now the republicans are at it again<u+2026>the party<u+2019>s over. wake up,<u+201d> the ad said. in fact, many congressional democrats were enthusiastic supporters of the passive-loss change, too, as a way of correcting what was widely perceived as an overreaction in the 1986 act. for his part, mr. trump appears to have spread around contributions to players on both sides of the debate. he was a fundraiser for mr. bush during his successful run for president in 1988, but also gave to a number of congressional democrats during the period. for example, he chipped in thousands of dollars to causes favored by then-house ways and means chairman dan rostenkowski, an illinois democrat, according to published reports at the time. in 1993, mr. trump was fined by federal elections officials for violating a watergate-era law capping contributions to federal candidates and campaign committees at $25,000 a year. at the 1991 hearing, before a house budget committee task force on urgent fiscal issues, mr. trump made it clear to lawmakers that he preferred to go back to<u+00a0>the looser<u+00a0>loss rules of the early 1980s, despite criticism that they generated unfair windfall deductions for passive investors, and encouraged overbuilding as well as tax shelters. mr. trump acknowledged the problems, but insisted the benefits outweighed the harm. <u+201c>i think it<u+2019>s a rule that works<u+201d> in getting people to invest, mr. trump testified.<u+00a0>the liberal rule of the 1980s could be limited, if need be, he added, but <u+201c>right now, we don<u+2019>t need limits<u+2026>we need action.<u+201d>
donald trump urged congress to loosen tax rules in early 1990s    - wsj
noauthor