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from the that-will-help-reduce-the-deficit,-right? dept.
The White House and congressional Republicans are finalizing a tax plan that would slash the corporate rate while likely reducing the levy for the wealthiest Americans
[...] The plan would likely cut the tax rate for the wealthiest Americans, now at 39.6 percent, to 35 percent, people familiar with the plan said Monday. They spoke on condition of anonymity ahead of a formal announcement.
In addition, the top tax for corporations would be reduced to around 20 percent from the current 35 percent, they said. It will seek to simply the tax system by reducing the number of income tax brackets from seven to three.
[...] Republican senators on opposing sides of the deficit debate have tentatively agreed on a plan for $1.5 trillion in tax cuts. That would add substantially to the debt and would enable deeper cuts to tax rates than would be allowed if Republicans followed through on earlier promises that their tax overhaul wouldn't add to the budget deficit.
https://www.apnews.com/d7929cdd15c3437db07147d219b391c4
(Score: 5, Informative) by Anonymous Coward on Tuesday October 17 2017, @07:58AM (11 children)
Yes, of course they are! How could they not? After all the money the Koch Bros, the Mercers, Sheldon Adelson, Peter Thiel, T. Boone Pickens, and a whole lot more, contributed to getting their tax rates reduced, do you think the Donald could do what is right for the Nation, at the risk of sleeping with the fishes? (and no, we are not talking about Melania here, and frankly, I resent the inference. Get your minds out of the money. )
(Score: 0) by Anonymous Coward on Tuesday October 17 2017, @10:57AM (10 children)
The real question is how much they plan to close tax loopholes. Companies like GE, Google, or Apple pay little or no taxes under the current system through clever paperwork. Collecting 35% of nothing is worse than 20% of something.
But this is Donald Trump and the Republican Party, so I'm not holding my breath that corporate taxes will be applied more evenly.
(Score: 3, Interesting) by takyon on Tuesday October 17 2017, @11:13AM (8 children)
Hasn't repatriating Apple's pile of overseas cash been on the agenda for years now? It's not like they aren't thinking about it. One news report I read suggested that 20% or 15% would not be low enough to convince companies to make a one-time repatriation of $. They would want it taxed as low as 10%.
As for the many loopholes in the tax code, they got there in the first place because politicians and lobbyists wanted them there. Forget the swamp, getting rid of those might be like draining an ocean.
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 3, Insightful) by Thexalon on Tuesday October 17 2017, @11:58AM (7 children)
Why would they want it taxed at 10%, when they've figured out a way to tax it at 0%? The claim that they'll repatriate all that cash and willingly pay a bunch of taxes if we just do as we say is bonkers.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 3, Informative) by takyon on Tuesday October 17 2017, @12:11PM (1 child)
https://www.nytimes.com/2017/04/05/business/dealbook/repatriate-corporate-cash-trump.html [nytimes.com]
https://www.cnbc.com/2017/04/28/companies-are-holding-trillions-in-cash-overseas.html [cnbc.com]
https://www.brookings.edu/opinions/dont-fall-for-corporate-repatriation/ [brookings.edu]
I think the basic argument is that if the companies are doing nothing much with the cash overseas, they might get more value from moving it back to the US, even with a 5-10% hit. One thing they definitely might do is use the cash for mergers/acquisitions.
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(Score: 5, Informative) by n1 on Tuesday October 17 2017, @04:03PM
My understanding of how it works now (I am not a PwC/KPMG/Deloitte account manager) ... US corporation gets a loan using offshore division as collateral... or, US corporation borrows from offshore division directly... It's all cheaper than any taxes, and even if it's only cheaper by a small amount, that's enough, and gives you more options later, having your cash in different divisions and jurisdictions, currencies etc when you're a large multinational corporation.
In the latter, this enables the US corporation to minimize tax even further by any potential profit from the capital spent ends up as fees and interest payments to the offshore company.
This is also done by individuals who run large companies... You get paid a token salary $1-$10,000 but you acquire loans using your stock holdings as collateral. So you can have a multi-million income from low interest loans, have an effective tax rate of 0% and pay a little interest, paid with your token salary, dividends or other investments, which may be tax deductible also.
(Score: 1) by khallow on Tuesday October 17 2017, @02:09PM (4 children)
Because tax is not income. Taxing at 10% can still be more profitable than having it sit somewhere at 0%, assuming of course, that 0% is the actual rate they are paying on the meager interest income they would get from cash sitting around.
(Score: 1, Informative) by Anonymous Coward on Tuesday October 17 2017, @03:52PM
I don't buy it. Hell, taxing at 90% is still more profitable than having it sit somewhere at 0%...
(Score: 2) by bob_super on Tuesday October 17 2017, @05:25PM (2 children)
> Taxing at 10% can still be more profitable than having it sit somewhere at 0%
You're conflating two separate things.
My neighbor manages a chunk of the money of a giant SoCal biotech company. They have an 11-figures sum of investments. They told him to be safe, so he gets 6% annual return on his 10-figures portfolio.
They are considering whether repatriating some of that cash may be worth it for dividends and good will, versus buying and investing outside of the US. Waiting to see what D.C. comes up with, while raking in that 6%.
No billions ever sit at 0%.
(Score: 1) by khallow on Tuesday October 17 2017, @08:33PM (1 child)
Indeed. If that money is in Ireland, then they're paying 12.5% for a corporate tax rate. That's among the lowest [taxfoundation.org] in Europe.
(Score: 4, Informative) by bob_super on Tuesday October 17 2017, @11:31PM
> If that money is in Ireland, then they're paying 12.5% for a corporate tax rate.
Or 0.0001%, like Apple...
https://en.wikipedia.org/wiki/Double_Irish_arrangement [wikipedia.org]
And that's on the profits of the company and its investments, not on the total assets.
(Score: 2) by Thexalon on Tuesday October 17 2017, @07:26PM
My guess is: not at all.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.