Yes, I would like to reiterate how, even though it wasn't the pony we wanted, the Maddow thing actually did shed a lot of light on Trump's use of the AMT. Which is valuable information going into something like this
I don't remember the name of the mechanism, but don't they also want to do away with the rule that distributes large (business) losses over a longer period of time? So the $900M loss that Trump filed, which was spread out over 10 years, would be a 1-year hit; and iirc would result in negative taxes that year.
Also, this is getting into the weeds, but the mortgage interest deduction actually reduces every year you are a homeowner. Mortgages don't charge simple interest. You actually stop paying mortgage taxes (roughly) 5-10 years before you fully pay off your home.
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FencingsaxIt is difficult to get a man to understand, when his salary depends upon his not understandingGNU Terry PratchettRegistered Userregular
Eh, publishing a general proposal and framework isn't exactly novel. It is how the lrocess generally goes.
It's just that usually the president continues to work at it.
I don't remember the name of the mechanism, but don't they also want to do away with the rule that distributes large (business) losses over a longer period of time? So the $900M loss that Trump filed, which was spread out over 10 years, would be a 1-year hit; and iirc would result in negative taxes that year.
I'd caution against rich people bashing. I don't think it's necessarily a bad thing for someone to be rich. Tax them appropriately, implement campaign finance reform (death to Citizens United!) so they can't straight up buy politicians, and beef up the estate tax so we do not have an aristocracy. Basically don't do what the GOP wants to do.
I'm pretty sure that peoples issue with the wealthy at this point is that a lot of them are utterly failing to give back into the system that has supported them up to this point; ostensibly tax breaks are supposed to exist so that they can encourage the wealthy to spend more money on things like creating new factories/stores, purchasing greater volumes of materials for their buisnesses and engaging in R&D.
The problem is, we're not really seeing that happen; the wealthy are investing in foreign markets, buying politicians or stuffing it into offshore accounts. None of which actually does citizenry any good as the aristocracy continues to bleat about how hard done by they are.
The rich are like a bull on a farm. Properly fenced and controlled, they are necessary to the functioning of the farm. Let them roam free, they wreck up everything.
You can't have a functioning capitalism without the rich, but they must be constrained to follow the law and contribute their fair share to taxes, which is a higher amount by proportion than the poor and middle-class. But they will always seek to avoid this, in the way a bull always tries to escape his field.
Does anyone here think that the repatriation tax forgiveness will actually bring a stimulus to the economy? Because I see it as trickle-down with different lipstick.
Does anyone here think that the repatriation tax forgiveness will actually bring a stimulus to the economy? Because I see it as trickle-down with different lipstick.
Eh. Even if they repatriate it I'm not sure they'll going to just immediately dividend it out or reinvest it or what. A bunch of big companies are just sitting on piles of cash at the moment.
Unless it's followed up with heavy penalties for NOT repatriating lots of them won't bother
I think they'll likely repatriate almost all of it if its tax free. A lot of tech companies have simply borrowed money domestically to compensate for not having the cash at home. I expect they'll repay some bonds, buyback some stocks and make some acquisitions.
Does anyone here think that the repatriation tax forgiveness will actually bring a stimulus to the economy? Because I see it as trickle-down with different lipstick.
Eh. Even if they repatriate it I'm not sure they'll going to just immediately dividend it out or reinvest it or what. A bunch of big companies are just sitting on piles of cash at the moment.
Yeah, if they actually do something with that money great. But if they just sit on it, it doesn't really matter if it's in an American bank account or a Swiss one.
The last profit repatriation went almost exclusively to share buybacks, dividends, executive compensation, and M&A. Very little went anywhere productive, like reinvestment or non-managerial wages.
I'd caution against rich people bashing. I don't think it's necessarily a bad thing for someone to be rich. Tax them appropriately, implement campaign finance reform (death to Citizens United!) so they can't straight up buy politicians, and beef up the estate tax so we do not have an aristocracy. Basically don't do what the GOP wants to do.
I'm pretty sure that peoples issue with the wealthy at this point is that a lot of them are utterly failing to give back into the system that has supported them up to this point; ostensibly tax breaks are supposed to exist so that they can encourage the wealthy to spend more money on things like creating new factories/stores, purchasing greater volumes of materials for their buisnesses and engaging in R&D.
The problem is, we're not really seeing that happen; the wealthy are investing in foreign markets, buying politicians or stuffing it into offshore accounts. None of which actually does citizenry any good as the aristocracy continues to bleat about how hard done by they are.
It's not that they refuse to. It's just that whether you have $1 million or $100 million in liquid assets won't change your propensity to invest in domestic job creation. That's purely down to the demand for domestically produced goods. If demand is strong then the investment will be there, if the demand isn't there then no amount of cash in the hands of the rich is going to convince them, as they'll just put more money in safe assets.
The last profit repatriation went almost exclusively to share buybacks, dividends, executive compensation, and M&A. Very little went anywhere productive, like reinvestment or non-managerial wages.
Because why should it? I mean, from the CEO's perspective. That's part of the problem with unbridled free market capitalism. The people making the decisions, unless incentivized, will always do what's best for them.
Now, if repatriation had to be spent (preferably in total, but I'd accept it being a high percentage), on infrastructure (both physical like plants, and/or labor, like more hires or better pay or a bonus for people under a certain threshold), or it being taxed at a higher rate than normal, then I wouldn't have an issue with it.
But that's not how the GOP works. No regulations! Business executives know best!
Unless it's followed up with heavy penalties for NOT repatriating lots of them won't bother
Why would they not bother? They’ve been waiting eight+ years for another tax holiday and there’s nothing to suggest that this one is different than the last one.
Also, this is getting into the weeds, but the mortgage interest deduction actually reduces every year you are a homeowner. Mortgages don't charge simple interest. You actually stop paying mortgage taxes (roughly) 5-10 years before you fully pay off your home.
Yes, this is all well and good, but unfortunately people can't just go to the bank and say "Hey, my house is worth less now, because some fraction of buyers who would previously have bid more due to a mortgage deduction won't bid. And I can't deduct my interest any more so I'd really like it if you just wrote down the loan to reflect the true value of the home"
Nope, what will happen if you just 'turn off' the mortgage deduction is that people will just walk away from their homes and declare bankruptcy. They've already been trained to do this by the financial crisis. This will leave banks with EVEN more stocks of housing which they are even less capable of selling. So sure, some people who bought their houses 20 years ago will be insulated from the directI effects of this, but that just makes it even worse. Creating YET ANOTHER mechanism to transfer wealth from the old to the young. And since the young are already struggling to maintain their very existence while also maintaining the older generations in a style which they are constantly told cant be afforded for them (because the same old people voted themselves tax cuts in the 90s creating this entire damn manufactured problem).
Unfortunately the only way to get rid of the mortgage deduction is just to say "The maximum value you can claim is capped at the current level and will not rise with inflation". Then the deduction slowly fades away as prices rise and you slowly migrate your way around the disasterous effects of just ending it. Or of just cutting the amount you can claim.
As I've said before. This bill is a tax hike on the middle class. It is not a tax cut other than for a small subset of the middle class living in cheap areas of red states. It's yet another way to transfer cash in a highly ineffective way from productive blue cities and young people to old people living in rural areas. After skimming off a MASSIVE chunk of that cash to give to billionaires and multinationals.
The companies know that the US political cycle favors just sitting on cash and waiting for a tax holiday. All they have to do is wait for the GOP to get majority and then ram through a tax holiday, so they just sit on that overseas cash just waiting. The first time we did a tax holiday, it was basically taught them to just wait. It's too late now, too, because the GOP can't see that, and will just keep doing what their corporate overlords tell them to do.
the fact that companies would rather let money sit around doing nothing than pay some tax on it is crazy
It's just math. They can use that money outside for stuff outside the US so it isn't really lost and if bringing it back in gives it an immediate 35% reduction...well eating inflationary losses for a few years is the better option.
At least so long as we keep having these repatriation holidays every decade or so. They have the entirely reasonable belief that if they wait they'll get a deal on the taxes when they bring it back.
The last profit repatriation went almost exclusively to share buybacks, dividends, executive compensation, and M&A. Very little went anywhere productive, like reinvestment or non-managerial wages.
Because why should it? I mean, from the CEO's perspective. That's part of the problem with unbridled free market capitalism. The people making the decisions, unless incentivized, will always do what's best for them.
Now, if repatriation had to be spent (preferably in total, but I'd accept it being a high percentage), on infrastructure (both physical like plants, and/or labor, like more hires or better pay or a bonus for people under a certain threshold), or it being taxed at a higher rate than normal, then I wouldn't have an issue with it.
But that's not how the GOP works. No regulations! Business executives know best!
Fuckers.
The worst thing is that the majority of it wont even be spent on managerial pay or share buybacks. But instead will be spent on mergers and aquisitions, allowing us to get even more monopolies and oligarchies. So we'll be subsidizing our own higher prices on goods.
I do very much like the idea of saying "You can bring the money back, at a very low rate, providing you use it with an equal split between building things/evenly distributed pay raises/new hiring" but I think thats ALREADY the case. If you bring a billion dollars into the country, but then bump your wages by a billion bucks for the year, I think you don't owe any tax.
The last profit repatriation went almost exclusively to share buybacks, dividends, executive compensation, and M&A. Very little went anywhere productive, like reinvestment or non-managerial wages.
Because why should it? I mean, from the CEO's perspective. That's part of the problem with unbridled free market capitalism. The people making the decisions, unless incentivized, will always do what's best for them.
'Incentivized' is really just changing the definition of 'what's best for them'.
the fact that companies would rather let money sit around doing nothing than pay some tax on it is crazy
It's just math. They can use that money outside for stuff outside the US so it isn't really lost and if bringing it back in gives it an immediate 35% reduction...well eating inflationary losses for a few years is the better option.
At least so long as we keep having these repatriation holidays every decade or so. They have the entirely reasonable belief that if they wait they'll get a deal on the taxes when they bring it back.
Urghh, its an incentive nightmare. The only way to fix it is some kind of retroactive punishment. Which is of course, illegal.
Honestly the Republicans, even in theoretical victory, are destroying this country. You can't do anything, or incentivise good decisions because businesses now know the republicans will just undo it regardless of how stupid it is. Pass environmental laws? Then businesses will wait to build their polluting plants until the Republicans have a 'poisoning people' holiday in 10 years!
the fact that companies would rather let money sit around doing nothing than pay some tax on it is crazy
It's just math. They can use that money outside for stuff outside the US so it isn't really lost and if bringing it back in gives it an immediate 35% reduction...well eating inflationary losses for a few years is the better option.
At least so long as we keep having these repatriation holidays every decade or so. They have the entirely reasonable belief that if they wait they'll get a deal on the taxes when they bring it back.
Urghh, its an incentive nightmare. The only way to fix it is some kind of retroactive punishment. Which is of course, illegal.
I think you could fix this with a constitutional amendment prohibiting repatriation holidays. A law would be insufficient: those are up in the air every four years or so, rather than the 100+ years for amendments. Of course, this same aspect of constitutional amendments is precisely why it's staggeringly unlikely to ever happen.
the fact that companies would rather let money sit around doing nothing than pay some tax on it is crazy
It's just math. They can use that money outside for stuff outside the US so it isn't really lost and if bringing it back in gives it an immediate 35% reduction...well eating inflationary losses for a few years is the better option.
At least so long as we keep having these repatriation holidays every decade or so. They have the entirely reasonable belief that if they wait they'll get a deal on the taxes when they bring it back.
On top of that, if you can get a loan at ~3% (I expect institutional rates to be lower based on the higher dollar values involved), then it's a no-brainer to borrow the money internally, since at that point you're basically playing interest rate arbitrage against the tax for repatriating.
Offshore tax shelter accounts aren't perfectly liquid are they? I always assumed that stuff was parked in short to mid term bonds or CDs or something.
Outside of organized crime and petty cash, cash never stays liquid for long.
Right, the money is held by foreign banks, and those banks are making investments using that money as banks usually do. So that money is already returning to the US in the form of stock/bond/asset purchases by foreign banks.
A tax repatriation holiday could cause a global bank run as US corps simultaneously withdrew trillions of dollars to take back to the states. If it was done poorly it would cause a global financial crisis.
Jephery on
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"Orkses never lose a battle. If we win we win, if we die we die fightin so it don't count. If we runs for it we don't die neither, cos we can come back for annuver go, see!".
Offshore tax shelter accounts aren't perfectly liquid are they? I always assumed that stuff was parked in short to mid term bonds or CDs or something.
Outside of organized crime and petty cash, cash never stays liquid for long.
Right, the money is held by foreign banks, and those banks are making investments using that money as banks usually do. So that money is already returning to the US in the form of stock/bond/asset purchases by foreign banks.
A tax repatriation holiday could cause a global bank run as US corps simultaneously withdrew trillions of dollars to take back to the states. If it was done poorly it would cause a global financial crisis.
No, it'd probably just be 2004 on steroids. And cause even larger offshore retention waiting for the next one.
I heard that Gary Cohn said that nobody cares about the mortgage deduction when they consider buying a home.
Still doing a great job not making this sound like a tax cut for the rich then.
Maybe they don't - but they will certainly care if their taxes go up due to its removal. It's most likely to target the Republican core constituency - well-off but not rich white people. They won't like this.
A thousand fucking dollars. For people making significantly more than the median family income. Christ. And in exchange we all get to build our own roads!
A thousand fucking dollars. For people making significantly more than the median family income. Christ. And in exchange we all get to build our own roads!
And that tax cut is a lie and will actually be a straight up tax hike for most Americans making between 50 and 150k
I'm not a big fan of companies holding cash overseas just to avoid taxes. I think we should switch to taxing money made in the US instead of anywhere it's earned. I haven't read up a ton on it, but I'm sure there are good ways to ensure profits aren't simply shifted abroad. However, any change should be made prospectively and cash built up to this point should still be subject to some form of repatriation.
At this point, fuck the corps. Tax 'em for every dollar they make in the country. They want to bring back profits from overseas to pump up their salaries, they get taxed extra on it unless they spend at least half of it directly on their company's infrastructure and/or non-managerial wages
"Go down, kick ass, and set yourselves up as gods, that's our Prime Directive!"
I heard that Gary Cohn said that nobody cares about the mortgage deduction when they consider buying a home.
Still doing a great job not making this sound like a tax cut for the rich then.
Maybe they don't - but they will certainly care if their taxes go up due to its removal. It's most likely to target the Republican core constituency - well-off but not rich white people. They won't like this.
Most of them live in rural areas where houses are cheaper and thus the mortgage deduction is small.
Doubling the standard deduction will cover most of them. Especially now after years of almost-free interest rates that they're locked into. I stopped being able to gain anything on itemizing within 8 or so years of owning my house thanks to the rock-bottom percentages (and my lack of other notable line items these days).
Triptycho: A card-and-dice tabletop indie RPG currently in development and playtesting
I heard that Gary Cohn said that nobody cares about the mortgage deduction when they consider buying a home.
Still doing a great job not making this sound like a tax cut for the rich then.
Maybe they don't - but they will certainly care if their taxes go up due to its removal. It's most likely to target the Republican core constituency - well-off but not rich white people. They won't like this.
Most of them live in rural areas where houses are cheaper and thus the mortgage deduction is small.
Doubling the standard deduction will cover most of them. Especially now after years of almost-free interest rates that they're locked into. I stopped being able to gain anything on itemizing within 8 or so years of owning my house thanks to the rock-bottom percentages (and my lack of other notable line items these days).
I agree. And with state/local income taxes no longer being an itemized deduction you'd have to be paying an awful lot of mortgage interest to get any benefit.
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lwt1973King of ThievesSyndicationRegistered Userregular
A thousand fucking dollars. For people making significantly more than the median family income. Christ. And in exchange we all get to build our own roads!
And that tax cut is a lie and will actually be a straight up tax hike for most Americans making between 50 and 150k
Tax Policy Center suggests that most in that range will see a modest tax break around 1%. About 1 in 7 in that range would owe $1000 more a year.
The plain old rich in the $155k-$305k bracket get a minor break that becomes a hike in the next decade.
A thousand fucking dollars. For people making significantly more than the median family income. Christ. And in exchange we all get to build our own roads!
Roads that will be sold off to private companies to temporarily cover the budget shortfall!
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It's just that usually the president continues to work at it.
They already did away with that rule.
I'm pretty sure that peoples issue with the wealthy at this point is that a lot of them are utterly failing to give back into the system that has supported them up to this point; ostensibly tax breaks are supposed to exist so that they can encourage the wealthy to spend more money on things like creating new factories/stores, purchasing greater volumes of materials for their buisnesses and engaging in R&D.
The problem is, we're not really seeing that happen; the wealthy are investing in foreign markets, buying politicians or stuffing it into offshore accounts. None of which actually does citizenry any good as the aristocracy continues to bleat about how hard done by they are.
You can't have a functioning capitalism without the rich, but they must be constrained to follow the law and contribute their fair share to taxes, which is a higher amount by proportion than the poor and middle-class. But they will always seek to avoid this, in the way a bull always tries to escape his field.
Eh. Even if they repatriate it I'm not sure they'll going to just immediately dividend it out or reinvest it or what. A bunch of big companies are just sitting on piles of cash at the moment.
I think they'll likely repatriate almost all of it if its tax free. A lot of tech companies have simply borrowed money domestically to compensate for not having the cash at home. I expect they'll repay some bonds, buyback some stocks and make some acquisitions.
Yeah, if they actually do something with that money great. But if they just sit on it, it doesn't really matter if it's in an American bank account or a Swiss one.
It's not that they refuse to. It's just that whether you have $1 million or $100 million in liquid assets won't change your propensity to invest in domestic job creation. That's purely down to the demand for domestically produced goods. If demand is strong then the investment will be there, if the demand isn't there then no amount of cash in the hands of the rich is going to convince them, as they'll just put more money in safe assets.
Now, if repatriation had to be spent (preferably in total, but I'd accept it being a high percentage), on infrastructure (both physical like plants, and/or labor, like more hires or better pay or a bonus for people under a certain threshold), or it being taxed at a higher rate than normal, then I wouldn't have an issue with it.
But that's not how the GOP works. No regulations! Business executives know best!
Fuckers.
Why would they not bother? They’ve been waiting eight+ years for another tax holiday and there’s nothing to suggest that this one is different than the last one.
Yes, this is all well and good, but unfortunately people can't just go to the bank and say "Hey, my house is worth less now, because some fraction of buyers who would previously have bid more due to a mortgage deduction won't bid. And I can't deduct my interest any more so I'd really like it if you just wrote down the loan to reflect the true value of the home"
Nope, what will happen if you just 'turn off' the mortgage deduction is that people will just walk away from their homes and declare bankruptcy. They've already been trained to do this by the financial crisis. This will leave banks with EVEN more stocks of housing which they are even less capable of selling. So sure, some people who bought their houses 20 years ago will be insulated from the directI effects of this, but that just makes it even worse. Creating YET ANOTHER mechanism to transfer wealth from the old to the young. And since the young are already struggling to maintain their very existence while also maintaining the older generations in a style which they are constantly told cant be afforded for them (because the same old people voted themselves tax cuts in the 90s creating this entire damn manufactured problem).
Unfortunately the only way to get rid of the mortgage deduction is just to say "The maximum value you can claim is capped at the current level and will not rise with inflation". Then the deduction slowly fades away as prices rise and you slowly migrate your way around the disasterous effects of just ending it. Or of just cutting the amount you can claim.
As I've said before. This bill is a tax hike on the middle class. It is not a tax cut other than for a small subset of the middle class living in cheap areas of red states. It's yet another way to transfer cash in a highly ineffective way from productive blue cities and young people to old people living in rural areas. After skimming off a MASSIVE chunk of that cash to give to billionaires and multinationals.
I think you underestimate the amount of dollars that would be paid (absolute numbers).
It's just math. They can use that money outside for stuff outside the US so it isn't really lost and if bringing it back in gives it an immediate 35% reduction...well eating inflationary losses for a few years is the better option.
At least so long as we keep having these repatriation holidays every decade or so. They have the entirely reasonable belief that if they wait they'll get a deal on the taxes when they bring it back.
The worst thing is that the majority of it wont even be spent on managerial pay or share buybacks. But instead will be spent on mergers and aquisitions, allowing us to get even more monopolies and oligarchies. So we'll be subsidizing our own higher prices on goods.
I do very much like the idea of saying "You can bring the money back, at a very low rate, providing you use it with an equal split between building things/evenly distributed pay raises/new hiring" but I think thats ALREADY the case. If you bring a billion dollars into the country, but then bump your wages by a billion bucks for the year, I think you don't owe any tax.
'Incentivized' is really just changing the definition of 'what's best for them'.
Urghh, its an incentive nightmare. The only way to fix it is some kind of retroactive punishment. Which is of course, illegal.
Honestly the Republicans, even in theoretical victory, are destroying this country. You can't do anything, or incentivise good decisions because businesses now know the republicans will just undo it regardless of how stupid it is. Pass environmental laws? Then businesses will wait to build their polluting plants until the Republicans have a 'poisoning people' holiday in 10 years!
I think you could fix this with a constitutional amendment prohibiting repatriation holidays. A law would be insufficient: those are up in the air every four years or so, rather than the 100+ years for amendments. Of course, this same aspect of constitutional amendments is precisely why it's staggeringly unlikely to ever happen.
Outside of organized crime and petty cash, cash never stays liquid for long.
On top of that, if you can get a loan at ~3% (I expect institutional rates to be lower based on the higher dollar values involved), then it's a no-brainer to borrow the money internally, since at that point you're basically playing interest rate arbitrage against the tax for repatriating.
Right, the money is held by foreign banks, and those banks are making investments using that money as banks usually do. So that money is already returning to the US in the form of stock/bond/asset purchases by foreign banks.
A tax repatriation holiday could cause a global bank run as US corps simultaneously withdrew trillions of dollars to take back to the states. If it was done poorly it would cause a global financial crisis.
"Orkses never lose a battle. If we win we win, if we die we die fightin so it don't count. If we runs for it we don't die neither, cos we can come back for annuver go, see!".
Still doing a great job not making this sound like a tax cut for the rich then.
No, it'd probably just be 2004 on steroids. And cause even larger offshore retention waiting for the next one.
Maybe they don't - but they will certainly care if their taxes go up due to its removal. It's most likely to target the Republican core constituency - well-off but not rich white people. They won't like this.
And that tax cut is a lie and will actually be a straight up tax hike for most Americans making between 50 and 150k
Doubling the standard deduction will cover most of them. Especially now after years of almost-free interest rates that they're locked into. I stopped being able to gain anything on itemizing within 8 or so years of owning my house thanks to the rock-bottom percentages (and my lack of other notable line items these days).
I agree. And with state/local income taxes no longer being an itemized deduction you'd have to be paying an awful lot of mortgage interest to get any benefit.
Most of my extended family believes that a flat tax of 10% without any deductions would be fair for everyone. So, no, it doesn't astound me.
Tax Policy Center suggests that most in that range will see a modest tax break around 1%. About 1 in 7 in that range would owe $1000 more a year.
The plain old rich in the $155k-$305k bracket get a minor break that becomes a hike in the next decade.
With the crazy rich getting around an 8% break.
edit: sourcing http://www.taxpolicycenter.org/taxvox/24-trillion-big-six-tax-plan-modest-middle-income-tax-cuts-big-benefits-rich
Roads that will be sold off to private companies to temporarily cover the budget shortfall!