Tax reform is actually looking pretty good.... (government, claim, income)
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While much of the media attention has focused on large corporations, small businesses employ about half of non-public sector American workers, making their health and success vital to the U.S. economy. Since the last major tax reform in 1986, establishing businesses as pass-throughs has become increasingly popular for entrepreneurs since it typically gives them lower tax rates than paying the corporate rate.https://www.usatoday.com/story/money...lan/100941120/
I love it so far because I own a small business and this will definitely help small business. Trump has been great for my business. I didn't vote for him but I will in the future even though I'm a minority, my business is my life. It's the first priority.
People forget about us when talking about corporate tax. Its either employees or large corps to most people but there are a lot of small business in America that have needed relief for quite some time. Obama wasn't great for my small business at all.
This plan will raise taxes on the wealthiest individuals and eliminate deductions. Raising taxes on large corporations just means the move their money around to somewhere else. Better to have the best tax rate here.
As far as everyone else they are doubling the standard deduction and lowering rates for low and middle class taxpayers so I think you are wrong.
Plus the repatriation plan is good and will bring in a lot of money.
I know it's complicated and thus people don't have a lot of basis to judge, but let's talk corporate taxation & repatriation. The sale of this plan is pure bull-spin on corporate taxes. Bear with me, I'm going to over-simplify to illustrate, but it's still pretty complicated:
The plan would repeal corporate AMT. Corporate AMT puts limits on companies who immediately expense the value of long-term assets. Sophisticated companies will avoid hitting AMT by only expensing enough assets to bounce against the 20% taxation that would trigger AMT. Say you're an airline generating 30B annual revenue with 4B routine operating expenses. But you also bought 15 jets with 30 year life at a total cost of $75B.
Say you want to account for the jets with straight-line depreciation: 75B depreciated over 30 years is $2.5B per year. So your taxable profit is 30B revenue - 4B routine operating expense - 2.5B depreciation expense for the jets.
You have 23.5B in profit to tax.
But Congress allows some other depreciation methods. You can take up to 50% bonus depreciation on qualifying assets (jets being an asset that will typically qualify). So you could have $37.5B depreciation, wiping out your profit for the year. Corporate AMT will essentially require you to pay 20% on the $23.5B operating profits.
The top corporate bracket is 35%, and it's on profits over ~18 million.
So your airline would normally pay $8.225B at that 35% rate. AMT requires you to pay 4.7B. So you can take bonus depreciation on, say, 5 of your jets. That's $25B of jets immediately depreciated $12.5B. So your $30B revenue - 4B routine operating expense - 12.5B bonus deprecation results in 13.5B taxable income & a tax bill of 4.725B (35% times $13.5B taxable income)--just a hair over the AMT. Without AMT, you use more bonus depreciation to wipe out your tax bill entirely.
And I didn't even get into the elimination of worldwide taxation for corporations--which has equally gigantic implications. They will render the repatriation tax absolutely null.
Corporate taxes need to be lowered to keep American corporations competitive in the global playing field. I know it makes people angry that those dang evil corporations (who are owned mostly by retirement and pension accounts) are making money but if we don't stay competitive we will lose them overseas and lose tax revenue anyway.
Corporate taxes need to be lowered to keep American corporations competitive in the global playing field. I know it makes people angry that those dang evil corporations (who are owned mostly by retirement and pension accounts) are making money but if we don't stay competitive we will lose them overseas and lose tax revenue anyway.
American corporations are not just competitive, but dominant on the global playing field.
This tax plan will hurt middle class families living in suburban Chicago, for example. The real estate tax on a very modest $250,000 home is a little over $5,000/year, and that will no longer be tax deductible. The middle class will have to pay federal income tax on that extra $5,000+/year.
I don't think the solution is forcing the rest of taxpayers to subsidize high tax rates in places like Chicago. Perhaps Cook County and whoever else is part of collecting property taxes there should lower rates down to where many areas are, about half of what you are now paying.
I don't want to be penalized by paying you to live somewhere that has a dysfunctional government.
I don't think the solution is forcing the rest of taxpayers to subsidize high tax rates in places like Chicago. Perhaps Cook County and whoever else is part of collecting property taxes there should lower rates down to where many areas are, about half of what you are now paying.
I don't want to be penalized by paying you to live somewhere that has a dysfunctional government.
Totally agree. Real estate taxes are in the $20k range where I live but at the same time, I don't agree with the federal government rewarding the idiots in my local government who run up our tax bills.
Each tax system should stand on its own and should not have deductions for taxes paid under another system- local, state, and federal. Otherwise you have the one subsidizing the other.
I don't think the solution is forcing the rest of taxpayers to subsidize high tax rates in places like Chicago. Perhaps Cook County and whoever else is part of collecting property taxes there should lower rates down to where many areas are, about half of what you are now paying.
I don't want to be penalized by paying you to live somewhere that has a dysfunctional government.
Subsidy is a funny way to put it. Every tax and spending policy results in some form of subsidy. State and local tax deductions have been quite long-standing now. Many, many counties and States will see middle class people negatively impacted by the elimination of State and local deductions.
With the middle class effectively losing income how are the corporations going to deal with lower sales?
How do these people come up with such tax plans?
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