WASHINGTON, DC—A week ago House Ways and Means Committee Chairman Dave Camp, R-MI. unveiled his proposal to remake the US tax code. In a nutshell the plan lowers tax rates significantly for individuals and corporations-while also eliminating most tax breaks and deductions.

On one hand, it is easy to dismiss Camp's proposal-most political observers say there little chance it will ever pass before the midterm and perhaps even the next presidential election.

Still, though, the plan has sent tremors-or shock waves depending on your perspective-through the business community. Why? Those same political pundits also see the plan as a basis for future legislation or bargaining chips in future budget negotiations. These ideas, in other words, are out there and likely here to stay.

If the proposal, as it is currently written, were to be implemented as is, the ramifications for commercial real estate would be significant. GlobeSt.com spoke with Jeff DeBoer, president and CEO of The Real Estate Roundtable, to get his take on the legislation and what he likes and dislikes about it.

GlobeSt.com: What are the key tax reform issues confronting the commercial real estate industry?

DeBoer: The threshold question that lawmakers must answer, the question that will heavily influence the future trajectory of our industry, is actually not specific to real estate. The central question is whether we will continue to encourage capital formation and risk-taking, or do we want to move away from a tax system that recognizes and rewards the risks that are inherent in capital-intensive, long-term investments. Much of what we have seen so far – reducing the differential between long-term capital gains and ordinary income, extending depreciation schedules for real property beyond the useful life of real estate assets, repealing the deferral of gain on like-kind exchanges – would have the detrimental effect of raising the cost of capital.

Raising taxes on new domestic investment is not the way to increase the productivity or improve the competitiveness of the U.S. economy.

GlobeSt.com: So would you say Camp's approach-which is generally to broaden the tax base and reduce the top marginal tax rate-is beneficial for the CRE industry?

DeBoer: Removing excessive complexity and unwarranted subsidiaries in the tax code would be good for the economy as a whole, and as a consequence, good for real estate. At the same time, we have a very different dynamic today than we did in 1986, when tax shelters and unintended tax loopholes were rampant. Today, most tax breaks benefit the middle class, such as deductions for mortgage interest, charitable contributions, and state and local taxes. It will be difficult for Congress to achieve a substantial rate reduction without raising taxes on working Americans. As discussed, we should retain incentives that promote capital formation, risk taking, and entrepreneurship-those features of the tax system are at the heart of the American economic model.

Second, Congress should not cut corners and create new economic distortions by lowering rates only on certain activities, such as the manufacturing of widgets, while preserving high tax rates on the manufacturing of productive real estate assets.

And third, we must avoid well-intentioned provisions that actually distort sound economic decisions. For example, moving toward a cost recovery system that aligns tax rules with the actual useful life of assets makes sense. But we should not overstate the life of buildings, which require constant capital expenditures and can become obsolete very quickly as workplace needs change.

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Come back on Monday when DeBoer talks specifics: his thoughts on Camp's proposal for the capital gains rate, the carried interest rate proposal and the move to eliminate the deductibility of state and local taxes.