Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Corporate cash on hand is at all time highs. It has not translated into a rapidly expanding economy for all. It has instead further collected at the top. The last 10 years of US economy are probably the biggest argument against the job creator tax break theory.
To be fair, a lot of that cash is held offshore because companies don't want to repatriate it and pay high US corporate tax on their foreign earnings. Leads to weird behavior like Apple piling up hundreds of billions of dollars overseas while borrowing in the US to cover their dividend.
If they can get 20% c corp AND require repatriation of off shore $ the market is going to go INSANE. I mean 30k is in reach within months of it's passage. As equities are just a projection of future earnings. Which should sure up all these unfunded pensions we have across the country. US will be THE PLACE to do business in the world. There will be a massive labor shortage which should push wages higher. Tax receipts will increase helping the debt. Beware of anti-american globalists trying to sell this as somehow anti-middle class, these people have no clue how to help the middle class.
A lot of the cash is due to the low yields on corporate bonds. For every dollar in additional cash on the corporate books, they've borrowed an additional three dollars.
Change in corporate tax rates will have little or no effect on the "unrepatriated" foreign profits since they're not unrepatriated and won't be taxed as long as they don't want it taxed. Notice that the government isn't proposing to do away with the law that allows the corporations to indefinitely defer taxes.
It is amazing how people talk about the corporate profits as it is a physical entity. It is electronically accounted for and resides in accounts belonging to subsidiaries. Given the size of the cash hoard, it's very unlikely that most of it is offshore.
It's doubtful this tax plan will fly at all. It eliminates deductions for the lower brackets while increasing deductions for the top bracket. Along with the preferred rate on dividends and carried interest, it provides another backdoor using the flow-thru entity for the those in the top tax bracket to get a much lower tax rate than the middle class.
. the top 10% income pay 70% of taxes.
. the bottom 50% pay less than 3% of taxes.
. almost 50% of all citizens pay no taxes.
. tax rates on corporations worldwide average 22% while in the US it is 39%.
A complete revamp of the tax system is badly needed but there are so many special interest positions and lies presented to the public it is very difficult to progress without stupid political resistance.
Effective tax rates matter. It's typical of dishonest, ignorant people to always talk on and on about the u.s having the highest tax rates in the world!!!! 39%!!!!!! U.s corporations don't pay anywhere near 39%. That's merely a marginal tax rate. They usually pay around 18 to 20 percent overall.
A lot of the cash is due to the low yields on corporate bonds. For every dollar in additional cash on the corporate books, they've borrowed an additional three dollars.
Change in corporate tax rates will have little or no effect on the "unrepatriated" foreign profits since they're not unrepatriated and won't be taxed as long as they don't want it taxed. Notice that the government isn't proposing to do away with the law that allows the corporations to indefinitely defer taxes.
It is amazing how people talk about the corporate profits as it is a physical entity. It is electronically accounted for and resides in accounts belonging to subsidiaries. Given the size of the cash hoard, it's very unlikely that most of it is offshore.
It's doubtful this tax plan will fly at all. It eliminates deductions for the lower brackets while increasing deductions for the top bracket. Along with the preferred rate on dividends and carried interest, it provides another backdoor using the flow-thru entity for the those in the top tax bracket to get a much lower tax rate than the middle class.
They're indefinitely deferring taxes in the us....because the money was made overseas and permanently reinvested overseas. They had to pay taxes on the money in the foreign nation already. I'm not sure why people think the companies should bring their "cash horde" back to the u.s when they'll have to pay taxes on it again, at high marginal rates, when they could just borrow new money in the u.s cheaper if they needed investment money domestically.
Blame congress being incompetent, not the corporations. They need to get off a world wide tax system and create a territorial system.
Curious how the standard deduction vs itemized works out. I know in NC they did this on state income tax and it was a 50/50 split of raising peoples taxes or lowering them.
One interesting thing is that it seems like a massive boon to anyone who rents. That would seem to be the people who might be really poor.
When I last looked into it, I will be paying more taxes as a single homeowner on a middle class salary (median salary where I live, since it’s a high COLA, is $93k for median salary, I earn $80k).
My plan to fix this for myself is to spend less and put more in my 401k to lower my taxable income. It all depends on if employer matching counts agains the maximum I can save or not. I’ll probably do this by buying less: spend less at Christmas, not take long trips to other parts of the country, and definitely not remodel the kitchen or bathrooms like I’ve been toying with.
To answer the question, for me it sucks. Either way I have to tighten my belt. It’s just do I do so to pay the US Government more or do so to save more.
I’ll be honest, I don’t quite have the intricate knowledge to see what losing the estate tax and lowering corporate taxes does. Based on what I’ve read so far sounds like it will mostly not impact average Americans or it will hurt them. Sounds about right.
To answer a question not asked, I don’t think it will pass. Because it raises taxes on who the GOP courts as voters (party of “family values” courts the middle class and especially those with children, who end up getting taxed more), I can’t see many in the GOP voting for it.
Last edited by BellaLind; 09-29-2017 at 04:51 AM..
Effective tax rates matter. It's typical of dishonest, ignorant people to always talk on and on about the u.s having the highest tax rates in the world!!!! 39%!!!!!! U.s corporations don't pay anywhere near 39%. That's merely a marginal tax rate. They usually pay around 18 to 20 percent overall.
You are confusing personal income taxes with corporate income taxes. Personal income taxes are graduated. Corporate income taxes pretty much aren't. Lots of businesses have nowhere to hide and are paying 35% of their profit in Federal corporate income taxes. It's accounting slight of hand that lowers the effective rate, not a graduated system.
The Federal corporate income tax rate is 35%, not 39%.
Apple is the biggest taxpayer. They sell all those iPhones in the US so they can't hide the profit offshore. Their effective tax rate is about 25.8%. The other companies with nowhere to hide like Walmart, AT&T, and Verizon similarly have at least a mid-20's effective tax rate.
The US problem is that industry sectors lobby their way into tax loopholes where they pay little or no corporate income taxes. General Electric is the poster child for it. The oil companies get that "oil depletion allowance". The correct fix is to level the playing field so all corporations pay similar rates on their profit.
I’ll be honest, I don’t quite have the intricate knowledge to see what losing the estate tax and lowering corporate taxes does. Based on what I’ve read so far sounds like it will mostly not impact average Americans or it will hurt them. Sounds about right.
The Federal estate tax exemption is $5.49 million in 2017. Pretty much anybody with more wealth than that sets up elaborate trusts to avoid paying the tax. Life insurance isn't taxable so rich people game that. Qualified family owned businesses avoid it. Taxing farms and vacant land on "actual use" valuation rather than fair market value sold at an arms length transaction.
If you lower the corporate tax rate while simultaneously plugging all the loopholes so it's revenue neutral, that's great. There isn't enough data to know if that's what is happening. Somehow, I highly doubt it.
We can all have our own ideas on this, but unless we are economists and most of are not, it is hared ot understand. Taxes and tax reform isn't a simple as some may think. Taking this and putting it there often is hard to understand but can be workable. I am anything but in the upper middle class or wealthy but I see is as a good plan. Will it need tweeking? Sure, still a good plan. Our kids, middle to upper middle class, middle aged and with grown families like it, especially both our daughters who own small businesses. For us, being retired, we are not affected by it much.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
