At a recent NAIOP Luncheon, Senator Pete Domenici indicated that the return of control to Congress to the Republicans will most likely spell T-A-X R-E-L-I-E-F for most people. Currently the Republicans are working on a tax plan to be known as USA for Unlimited Savings Account. The basic idea behind this plan is to encourage Americans to save money. If this plan is approved and passed as currently presented, your annual taxes would be based on your gross income less investments (savings) and deductions. Stated another way - any money that you invest (as savings) would be with pre-tax dollars. Other items on this tax bill agenda: Corporations will be able to capitalize expenses rather than accrual on books, passive losses to be reinstated (albeit on a smaller scale), remove impediments that prevent the securizatation of Commercial Real Estate loans on the secondary market, extend the current low income housing tax credits, remove the tax penalty for owners of IRA when they make a first time home purchase. Senator Domenici finished his presentation with the explanation that this new tax plan is to incentize individuals and corporations to invest in America and to be competitive with the rest of the world. What kind of market impact will this have on the market? One can foresee a time when the capital gain tax reduction will encourage current owners who have held properties since pre 1986 to sell their properties and take advantage of a reduced tax and sell their properties. If your an anxious buyer, this tax reform may bring about a long needed market equalization that apartment construction has so for been unable to fulfill - the return of higher CAP rates attributed to more properties being brought to market.