The tax rates proposed should be inverted, so as to encourage small independent enterprises and penalize large overcapitalized and legally-immortal corporate behemoths. Tax cuts for PEOPLE, not corporate Struldbrugs.Framework for tax overhaul would slash corporate rate to 20%President Donald Trump and Republican leaders launched an urgent effort to get a major legislative win this year, announcing a long-awaited tax plan that will immediately set off a fight over how much top earners should pay.
Rate for pass-through businesses would be capped at 25%
The framework proposes cutting the top individual rate to 35 percent -- but leaves it up to Congress to decide whether to create a higher bracket for those at the top of the income scale, according to the document released Wednesday.
Read Proposed Plan HERE
The rate on corporations would be set at 20 percent, down from the current 35 percent, and businesses would be allowed to immediately write off their capital spending for at least five years. Pass-through businesses would have their tax rate capped at 25 percent.
U.S. stocks pushed toward all-time highs, with a Goldman Sachs basket of companies that pay the highest tax rates pacing gains. The group added 0.5 percent at 10:20 a.m. in New York, poised to outperform the broader market for a sixth straight day.
The plan sets out three tax brackets for individuals -- 12 percent, 25 percent and 35 percent, down from the existing seven rates, which top out at 39.6 percent. But that’s not firmly set, as congressional tax-writing committees will be given flexibility to add a fourth rate for the highest earners -- an effort to prevent the overhaul from providing too much of a benefit for the wealthy.
There’s significant support among Republican members of the tax-writing House Ways and Means Committee to create a special top income-tax bracket for the highest earners, according to a GOP member of the panel who asked not to be named because discussions are private. Still, House Ways and Means Chairman Kevin Brady of Texas has said he’s committed to offering across-the-board tax relief. Trump has repeatedly said he’s focusing on middle-class individuals.
At the same time, though, the tax plan calls for repealing the alternative minimum tax, the estate tax and the generation-skipping estate tax, all of which would be a boon for higher earners and the wealthy.
“The last thing we should be doing right now is providing hundreds of billions in tax breaks to the wealthiest people and most profitable corporations in this country,” Senator Bernie Sanders, a Vermont independent who caucuses with the Democrats, said in an emailed statement. “It is particularly obscene to repeal the estate tax that would provide a $269 billion tax break to the top 0.2 percent.”
The release of the plan -- which Trump will tout Wednesday during a speech in Indiana -- is the result of a months-long process to craft a tax overhaul that was a key promise in Trump’s campaign. But it marks only the start of what could be a brutal fight in Congress among lawmakers who disagree on key elements of the framework. One influential skeptic has been Senate Finance Committee Chairman Orrin Hatch, a Utah Republican, who pledged his committee would not be a “rubber stamp” for the plan.
Other Republicans cheered the plan. “At first glance, the policies released today are good news to the American people,” Representative Mark Walker of North Carolina, chairman of a large conservative caucus, said in statement. “We need to begin acting on this framework legislatively as soon as possible.”
Trump selected Indiana for the speech because of the manufacturing resurgence experienced during the tenure of Vice President Mike Pence, who served as the state’s governor before his election last year. Democrats have attributed increases in manufacturing to recovery programs championed by former President Barack Obama. The speech is expected to include references to Indiana citizens who believe they would benefit from the proposed changes to the tax code.
The tax effort begins one day after Senate leaders decided not to move forward with a vote on repealing Obamacare, one of the most central promises of Trump’s presidential campaign. But Trump has said that tax legislation -- which he calls essential for stimulating economic growth -- has been his main focus.
Trump has told others that he expects lawmakers to work at a brisk pace. If not, he and the Republican Congress would end 2017 without a single major legislative victory.
International Plans
On the international side, the plan would move toward a “territorial” approach that would scale back the U.S.’s unique worldwide approach to taxing corporate profits regardless of where they’re earned. But it includes “rules to protect the U.S. tax base by taxing at a reduced rate and on a global basis the foreign profits of U.S. multinational corporations.” The amount of that reduced rate isn’t specified.
Companies with accumulated offshore profits would be subject to a one-time tax on those earnings -- clearing the way for that income to return to the U.S. The rates that would be applied are unclear, but there would be a higher rate for income held in cash compared to the rate for less liquid investments. Firms would be able to pay the new tax over several years.
Under current law, companies can defer paying U.S. tax on their offshore earnings until they bring them to the U.S. As a result, U.S. firms have stockpiled an estimated $2.6 trillion in profit offshore.
So-called pass-through entities, which include partnerships and limited liability companies, would see their rate capped at 25 percent. Currently, those businesses -- which can range from mom-and-pop grocers to hedge funds -- don’t pay income tax themselves but pass their earnings through to their owners, who then pay tax based on their individual rates.
While the pass-through rate cut would represent a major tax break for lucrative pass-throughs, tax-writers would craft measures aimed at preventing individuals from recharacterizing their personal wages as business income.
Middle-Class Benefits
In terms of middle-class benefits, the framework outlines a near doubling of the standard deduction -- to $12,000 for individuals and $24,000 for married couples -- and calls for “significantly increasing” the child tax credit from the current $1,000 per child under 17. It would also expand eligibility to include more upper-middle class parents.
The tax plan still lacks extensive details about ways to offset its rate cuts with additional revenue. It says most itemized deductions for individuals should be eliminated, without providing specifics -- while calling for mortgage interest and charitable giving deductions to be preserved. The tax exemption for municipal bonds would also be retained.
However, the state and local tax deduction would be abolished. Ending that break, which tends to benefit high-income filers in Democratic states, would raise an estimated $1.3 trillion over a decade. The move faces some Republican headwinds from lawmakers in districts that use the deduction heavily.
The plan would also limit the interest deduction companies can take on their borrowing, but no additional details were provided. Congress’s tax-writing committees will be tasked with limiting other business credits to help generate additional revenue.
Seeking Offsets
House leaders have proposed abolishing the corporate interest deduction, a move opposed by debt-reliant industries like private equity and commercial real estate. Senate leaders, including Hatch and John Thune of South Dakota, the chamber’s No. 3 Republican, have said they want to maintain the deduction at some level at least.
The lack of consensus on how to offset tax cuts -- a prerequisite to making them permanent under the procedure that Senate leaders plan to use to pass the legislation -- poses hurdles. If they fail to raise enough money to avoid a long-term hit to the deficit, at least part of the package would have to expire within a decade under current rules.
But as tax writers surface ideas to raise revenue by closing loopholes or ending specific tax breaks, they’ll unleash a torrent of lobbying similar to the campaign that killed a proposed border-adjusted tax earlier this year.
“We’re already working on it,” said Carlos Curbelo, a member of the Ways and Means panel, in reference to finding offsets.
“There are a number of pay-fors out there that are not just pay-fors, but also good elements of tax reform that will level the playing field across the economy and lead to greater growth,” said Curbelo, a Florida Republican. He said the committee’s goal is to make the tax changes as permanent as possible.
“So we’re in search of it and we’re getting close, very close,” he said.
Friday, September 29, 2017
Trump Tax Plan Rewards "Bigness" and Punishes "Smallness"?
Snark, Inc.
- Lewis Caroll, "The Hunting of the Snark: Fit the Third, the Baker's Tale"They roused him with muffins--they roused him with ice--
They roused him with mustard and cress--
They roused him with jam and judicious advice--
They set him conundrums to guess.
When at length he sat up and was able to speak,
His sad story he offered to tell;
And the Bellman cried 'Silence! Not even a shriek!'
And excitedly tingled his bell.
There was silence supreme! Not a shriek, not a scream,
Scarcely even a howl or a groan,
As the man they called 'Ho!' told his story of woe
In an antediluvian tone.
'My father and mother were honest, though poor--'
'Skip all that!' cried the Bellman in haste.
'If it once becomes dark, there's no chance of a Snark--
We have hardly a minute to waste!'
'I skip forty years,' said the Baker, in tears,
'And proceed without further remark
To the day when you took me aboard of your ship
To help you in hunting the Snark.
'A dear uncle of mine (after whom I was named)
Remarked, when I bade him farewell--'
'Oh, skip your dear uncle!' the Bellman exclaimed,
As he angrily tingled his bell.
'He remarked to me then,' said that mildest of men,
' 'If your Snark be a Snark, that is right:
Fetch it home by all means--you may serve it with greens,
And it's handy for striking a light.
' 'You may seek it with thimbles--and seek it with care;
You may hunt it with forks and hope;
You may threaten its life with a railway-share;
You may charm it with smiles and soap--' '
('That's exactly the method,' the Bellman bold
In a hasty parenthesis cried,
'That's exactly the way I have always been told
That the capture of Snarks should be tried!')
' 'But oh, beamish nephew, beware of the day,
If your Snark be a Boojum! For then
You will softly and suddenly vanish away,
And never be met with again!'
'It is this, it is this that oppresses my soul,
When I think of my uncle's last words:
And my heart is like nothing so much as a bowl
Brimming over with quivering curds!
'It is this, it is this--' 'We have had that before!'
The Bellman indignantly said.
And the Baker replied 'Let me say it once more.
It is this, it is this that I dread!
'I engage with the Snark--every night after dark--
In a dreamy delirious fight:
I serve it with greens in those shadowy scenes,
And I use it for striking a light:
'But if ever I meet with a Boojum, that day,
In a moment (of this I am sure),
I shall softly and suddenly vanish away--
And the notion I cannot endure!'
Tuesday, September 26, 2017
The Popularity of "Not Trump"
Republican Gov. Larry Hogan remains popular in Democratic Maryland, where he is largely viewed as a moderate who has taken the state in the right direction, a new poll has found.
About 62 percent of state residents approve of the job Hogan is doing as governor, according to Goucher Poll results released Monday. Fifty-nine percent of Democrats approve of his work.
At the same time, more than a quarter of Hogan’s GOP base believes the governor has put too much distance between himself and President Donald J. Trump, a fellow Republican.
The distance, analysts say, might have worked to Hogan’s advantage.
Trump’s disapproval ratings have climbed since the February poll. But he’s still more popular than Congress.
About 71 percent of people surveyed disapproved of Trump’s tenure. Fifty-six percent said they strongly disapproved. Ninety-three percent of Democrats disapproved of the president’s work so far. Seventy-one percent of independents and 21 percent of Republicans disapproved.
Pollsters interviewed 671 Maryland adults from Sept. 14 through 17. Five hundred thirty-three said they were registered voters. The survey has a 3.8 percentage-point margin of error.
Although 28 percent of Republicans think Hogan has distanced himself too much from Trump, it hasn’t dampened GOP enthusiasm for the governor. The governor’s approval rating among Republicans is 82 percent.
Democrats outnumber Republicans in Maryland by more than two to one.
Hogan’s popularity is driven by ”just consistency,” said Mileah Kromer, director of the Sarah T. Hughes Field Politics Center at Goucher College, which conducted the poll.
“People like hearing a clear, consistent economic message from the governor,” she said.
Most of the poll’s findings painted a positive picture of Hogan’s reelection chances in 2018. {***DANGER WILL ROBINSON!!!!***}
A majority of registered voters — 51 percent — say they either plan to vote for Hogan, or are “leaning” toward doing so. The poll found a 6 percentage-point uptick since February in the percentage of voters who say they’ll definitely vote for someone else. That group now represents 21 percent of respondents.
“If we were going to see some sort of Trump effect, you would have expected it to show up by now,” said Todd Eberly, political science professor at St. Mary’s College.
“His approval rating fell among Republicans, and I have to imagine some of that is the party base upset about him breaking with Trump, upset about” Hogan’s support for removing the statue of former Chief Justice Roger B. Taney from the State House grounds, Eberly said. “I don't think that in 2018 that would make them go out and vote for a Democrat.”
Seven Democrats have announced plans to run against Hogan: Baltimore County Executive Kevin Kamenetz, Prince George’s County Executive Rushern L. Baker III, state Sen. Richard S. Madaleno, former NAACP CEO Ben Jealous, Baltimore lawyer Jim Shea, author and tech entrepreneur Alec Ross, and Krish Vignarajah, a former aide to Michelle Obama.
A growing number of residents think the state is on the wrong track, but they’re still in the minority.
“Folks are a little bit less optimistic about the direction of the state,” Kromer said. “It's always difficult to disentangle what exactly that’s about.”
Fifty-five percent of respondents thought Maryland was on the right track. Most of the people who felt that way were also Hogan supporters.
The percentage of respondents pessimistic about the state’s direction increased by nine percentage points since the February poll.
Twenty-four percent said the economy was the most important issue facing the state. Fourteen percent thought education was the top issue, and 10 percent worried most about crime and criminal justice.
Hogan focused on pocketbook issues during his 2014 campaign, and has hewed closely to financial and business issues during his first two and a half years in office. Poll respondents were generally optimistic about Maryland’s economy. Fifty-seven percent said they felt “mostly positive” about it.
Residents don’t agree on where Hogan falls on the ideological spectrum. A little less than half of all residents, 45 percent, identified Hogan as a moderate, but about a third, 31 percent, thought he was conservative. Seven percent defined him as a liberal.
There were also mixed views among residents about Hogan’s place within broader Republican politics.
Forty-four percent said he represented “the future” of the party, and 24 percent said he represented the past. (The rest thought he represented both, neither, or they didn’t know.)
Congress continued to have dismal approval ratings, reflecting a national mood about the effectiveness of federal lawmakers. About 88 percent of those surveyed disapproved of the job Congress was doing. Fifty-nine percent said they “strongly disapprove.” That’s the most disillusionment with Congress since October 2013, when the federal government shut down amid a budget dispute.
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