Trumps Tax Plan: Low Rate for Corporations, and for Companies Like His

[TomCADem]

Source: MSN/NY Times

President Trump plans to unveil a tax cut blueprint on Wednesday that would apply a vastly reduced, 15 percent business tax rate not only to corporations but also to companies that now pay taxes through the personal income tax code — from mom-and-pop businesses to his own real estate empire, according to several people briefed on the proposal.

The package would also increase the standard deduction for individuals, providing a modest cut for middle-income people and simplifying the process of filing tax returns, according to people briefed on its details. That proposal is opposed by home builders and real estate agents, who fear it would diminish the importance of the mortgage interest deduction. And it is likely to necessitate eliminating or curbing other popular deductions, a politically risky pursuit.

It is not clear whether the plan will include Mr. Trump’s promised $1 trillion infrastructure program, but it will jettison a House Republican proposal to impose a substantial tax on imports, known as a border adjustment tax, which would have raised billions of dollars to help offset the cost of the cuts, two of the people said.

With that decision, Mr. Trump acceded to pressure from retailers and conservative advocacy groups, but the move could deepen the challenge of passing a broad tax overhaul in Congress, where concern about the swelling federal deficit runs high. His plan would put off the difficult part of a tax overhaul: closing loopholes and increasing other taxes to limit the impact of tax cuts on the budget deficit.

Read more: http://www.msn.com/en-us/news/politics/trump%E2%80%99s-tax-plan-low-rate-for-corporations-and-for-companies-like-his/ar-BBAni6e

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So its just the tax cuts to the rich without even the border adjustment tax. Why stop there? Why not pass a $1 hundred million subsidy to rich people with daughters named Ivanka whose last name starts with T?

[MiniMe]

1. Very soon, they will be going after the mortgage deduction

That has been on the repukes list for a while. By raising the exemption amount, and with the low interest rates currently, a lot of people may not be able to deduct above the individual exemption. That deduction was what allowed me to be able to afford my house when I bought it.

[C Moon]

2. Oh c'mon now...that's just a coincidence. :D What a 100% bastard!

[chowder66]

3. The .0001 % are costing this nation waaaay too much money.

It's all about them and they are stealing from all of us. Check your wallets everyone!!

[muriel_volestrangler]

4. Trump's Tax Plan Looks Like a Plutocrat's Dream; and overseas earnings tax cut to 10%

In assessing the Administration’s approach, the question to ask is: Will these measures help alleviate the most pressing economic problems facing the country, such as sharply rising inequality and the stagnant growth in wages and productivity? The short answer is no. In all likelihood, wages and productivity would be largely unaffected by Trump’s tax cuts. And, since the giveaways would be concentrated on the very rich, measures of post-tax inequality would rise.

Trump’s supporters and some conservative economists would disagree with these conclusions, of course. Their argument is familiar: that cutting taxes, particularly corporate taxes, would unleash a wave of investment, innovation, and growth, in turn boosting wages. But the supporting evidence is weak. In the past ten years, Britain has cut its corporate tax rate from thirty per cent to nineteen per cent. The share of gross fixed-capital formation in G.D.P. is still much lower than it was in the nineteen-seventies, when the tax rate on corporations was more than fifty per cent. And wage growth was a lot stronger back then, too.

Because of all the loopholes in the U.S. tax code, the effective corporate tax rate is already a lot lower than the official rate of thirty-five per cent. In a 2014 study, the Congressional Research Service estimated that the average rate paid by large corporations was 21.7 per cent. A study by the group Citizens for Tax Justice found that the effective rate was 19.4 per cent. Although levelling the playing field at fifteen per cent would boost after-tax corporate profits somewhat, it’s hard to see that translating into big gains in capital investment and wages. Even Ben Bernanke, the former Fed chairman—who supports this type of reform—conceded to the Times that its impact would be modest. “I don’t think it’s going to create a productivity miracle or anything like that. . . . It would probably improve investment a little bit,” he said.
...
According to the nonpartisan Center for Tax Policy, cutting the corporate rate to fifteen per cent would cost about $2.4 trillion over ten years. If you add in all the personal-income-tax cuts that Trump proposed during last year’s campaign, the tab comes to about $9.5 trillion. Even the original Voodoo Economists in the Reagan Administration would have blanched at claims that more rapid economic growth could close a fiscal hole of this size. If the White House persists with its flaky argument, it will have trouble selling its plan to deficit hawks in the Republican Party, let alone to Democrats.

http://www.newyorker.com/news/john-cassidy/trumps-tax-plan-looks-like-a-plutocrats-dream

President Trump eyes steep cuts to corporate tax rates, repatriated earnings

Another official said Trump would propose a repatriation tax on offshore earnings of 10 percent, compared with the current 35 percent, the report said.

http://www.cnbc.com/2017/04/25/president-trump-eyes-10-tax-on-offshore-earnings-held-by-us-companies-report.html

This is a classic Republican scam: slash a tax rate to an unsustainable level, so that the biggest corporations, who have been able to wait for it, can take advantage, and they all rush to use it with the accumulated overseas profits. The Republicans then claim the tax revenue for that year shows how brilliant they are, knowing that future tax revenue will be a fraction of what it was - and future Democratic administrations/congresses have to either try to get revenue back up by increasing the rate (and then corporations will start again, keeping profits abroad until a Republican combination can enact the next giveaway) or have to accept lower revenue and thus spending.

[chelsea0011]

5. Hmmmm...time to make myself a corporation. Remember. Corporations are people.

[SergeStorms]

6. Right out of the Ronnie Raygun play book.

Cut taxes, cut taxes, cut taxes.......but then take away the deductions that most middle income people rely on to keep their tax burden within reason. Net result; A TAX INCREASE!

Ronnie Raygun tripled the national debt. Trump is in line to do the same, or much worse. I seem to remember a day when Republicans bragged about being the party of "fiscal responsibility". Eh.....it's probably my imagination. I'm getting up there in years and my mind wanders....................but I could have SWORN I remember Republicans running campaigns on the spendthrift ways of Democrats. I'd better do a crossword puzzle or something.