Trump Tax Reform: WINNERS
PRESIDENT TRUMP AND HIS FAMILY
- Trump, along with his son-in-law Jared Kushner, who is part owner of his own real estate firm, will benefit from lower taxes on so-called “pass through” income, which is money earned by partnerships and other types of businesses whose income is passed through to its owner and taxed at the individual tax rate
- both benefit from breaks for commercial real estate in the tax legislation
- under current law, that income is taxed at rates as high as 39.6%, but Under the bill, much of that income could be taxed at a rate as low as 29.6%, subject to some limitations
- real estate also avoided new limits on interest deductions and retained its ability to defer taxes on the exchange of similar kinds of properties
BIG CORPORATIONS
- big retailers will benefit from the new corporate rate of 21%, since those companies pay relatively close to the full 35% rate
- multinational industries, particularly technology and pharmaceutical companies, like Google, Facebook, Apple, Johnson & Johnson and Pfizer have accumulated nearly $3 trillion offshore, mostly in tax haven subsidiaries, untouched by the United States taxman
- tax bill forces those companies to gradually bring that money home, but it will be taxed at rates ranging from 8% to 15.5%, far lower than the new 21% rate
- American companies will no longer owe full corporate taxes on future profits they say they earn abroad, providing more incentive to push income into tax haven subsidiaries
- the bill even includes provisions that could encourage companies to move workers abroad, despite pledges to do the opposite
MULTIMILLIONAIRES
- “death tax” was lifted to $22 million from $11 million meaning a big tax cut for people with estates worth tens of millions of dollars
- top rate applying to wages and interest income would be cut to 37% from 39.6%
PRIVATE EQUITY MANAGERS
- the purported reform to this tax provision will affect few if any private equity managers, leaving the loophole intact
PRIVATE SCHOOLS AND THE PEOPLE WHO CAN AFFORD THEM
- a type of tax-preferred savings plan — known as a 529 plan — to save for their children’s’ elementary and secondary education.
- currently these savings plans are only eligible for college, but be expanded to allow for up to $10,000 a year for tuition at private and religious schools
THE LIQUOR BUSINESS
- excise taxes for small brewers and distillers are reduced in the final agreement
- those industries are often based in rural areas, have strong lobbyists, and located in states with powerful senators, like Senator Rob Portman of Ohio
- Portman tucked a provision to help craft brewers into the Senate legislation
ARCHITECTS AND ENGINEERS
- originally restricted in how much they could benefit from the new pass-through provision but the final version will let them benefit fully
TAX ACCOUNTANTS AND LAWYERS
- despite Trump's pledge to simplify the tax code, the rushed legislation will probably have the opposite effect
- complicated new provisions, staggered dates and new rates
- a boom in business advising clients on how to restructure their employment and compensation arrangements to take advantage of the lower tax rates on income reported by corporations and pass-through entities
:angrymob::angrymob::angrymob::angrymob::angrymob::angrymob::angrymob::angrymob:
Trump Tax Reform: LOSERS
PEOPLE BUYING HEALTH INSURANCE
- repeal of the individual mandate,according to the Congressional Budget Office, will result in higher premiums that will result in 13 million fewer Americans with health coverage
INDIVIDUAL TAXPAYERS IN THE FUTURE
- to stay under the $1.5 trillion limit, the proposed cuts for individuals and families temporary will expire at the end of 2025, but corporate tax cuts will be permanent
- Republicans contend that future Congresses to extend the lower rates but there are no guarantees,
- use of a less generous measure of inflation would push taxpayers into higher tax brackets more quickly
THE ELDERLY
- automatic cuts based on 2010 legislation will target Medicare, the health insurance program for the elderly and disabled
- dozens of other programs are likely to be cut as well
LOW-INCOME FAMILIES
- claims using the earned-income tax credit will lose out on at least $19 billion over the coming decade under the bill because of the change in the way inflation is calculated
PEOPLE IN HIGH PROPERTY TAX, HIGH INCOME STATES
- homeowners in high-tax states like New York, New Jersey and California could be big losers, particularly if they have high property taxes
- ability to deduct their local property taxes and state and local income taxes from their federal tax bills is now capped at $10,000 and could offset any benefit of lower income tax rates
PUERTO RICO
- had sought an exemption from new taxes, citing the frail state of its economy nearly three months after Hurricane Maria
- tax bill treats affiliates of American companies on the island as if Puerto Rico were a foreign country and imposes a 12.5% on intellectual property
- Puerto Rico’s governor said this tax would hurt the biomedical and technology affiliates that make up about a third of Puerto Rico’s tax base
http://www.msn.com/en-us/news/polit...e-tax-bill/ar-BBGOZ8V?li=BBnb7Kz&ocid=msnbcrd
:angrymob::angrymob::angrymob::angrymob::angrymob::angrymob::angrymob::angrymob:
