Relevant and even prescient commentary on news, politics and the economy.

The Republican Party’s Heartlessness–the Casualty Loss Provision of the purported “tax reform” legislation

The Republican Party’s Heartlessness–the Casualty Loss Provision of the purported “tax reform” legislation

The GOP is cruising towards passage of its class warfare tax legislation that continues the long trend of Republican tax policy to redistribute upwards to the very rich.  The legislation, however, is supported by a small minority of the American public (latest polls put support for the tax legislation at less than 30%). See, e.g., Allan Smith, Polls show key Republicans could get whacked by the tax bill, Business Insider.com (Dec. 4, 2017). That’s astonishing when you consider that one provision in both the House and Senate bills that is used as a “revenue raiser” to pay for the huge tax subsidies to corporations and wealthy taxpayers will be especially hard hitting to lots of middle class and lower-income people, including many who voted for Trump.

The legislation will gut the “casualty loss” provision that currently allows taxpayers to deduct losses from hurricanes and fires and other accidents and forces of nature, to the extent those losses aren’t covered by insurance (after a $100 per loss limitation).  Thus, people who were flooded by Harvey can claim casualty losses on their 2017 tax returns for amounts not covered by insurance.  People who lost their homes in the fires that raged earlier this fall in northern California can claim casualty losses on their 2017 tax returns for amounts not covered by insurance.  But, as Bob Cesca notes for Salon.com, As L.A. Burns, Republicans Vote for a Tax Hike on the Victims (Dec. 8, 2017).  See also Thomson Reuters Tax & Accounting News, 2017 Tax Reform: proposed individual tax changes in the ‘Tax Cuts & Jobs Act’ (Nov. 3, 2017) and Sally Schreiber et al, Details of Tax Reform Legislation Revealed, Journal of Accountancy (Nov. 2, 2017) (noting that the personal casualty loss is repealed, except, in the House version, for such losses associated with special disaster relief legislation–which requires congressional action for each one); Tony Nitti, Senate Releases Tax Bill: Here’s How It Compares to Current Law & the House Plan, Forbes.com (Nov. 10, 2017).

You have to wonder just how the Republican Party and Trump administration became so completely heartless.  And why they think that Americans won’t notice that they only care about multimillionaires in the “one percent”.

Comments (3) | |

Hope Lives: Pressing Collins and Corker and Flake on Tax Bill

Hope Lives: Pressing Collins and Corker and Flake on Tax Bill

The Republicans’ proposed tax legislation–whether the House or Senate version–is despicable.  It will exacerbate the already devastating income and wealth inequality in this country, leave the federal government without adequate funds for real infrastructure and social safety net needs, and place in almost inviolable power the wealthiest oligarchs of the country (and even the good ones exert a power that no one should possess in a democracy).

My previous posts on this so-called “tax reform” “simplification” package (it is neither) have outlined a number of pernicious provisions in the bills.  There are a few I haven’t mentioned, such as the likely inclusion of taxation of tuition benefits to undergraduate and graduate students.  That will have an immediate impact on education and on basic scientific research.  Not surprising, given Paul Ryan, Donald Trump, and Mitch McConnell’s aversion to fact-based science and intellectuals, but nonetheless devastatingly harmful to the country in loss of prestige for our universities, loss of the top minds to other countries, and loss of entrepreneurial and innovational thinking that will hamstring commerce and productivity.  Another is the “new” talk in the House of lowering the tax rate on the weathiest bracket by as much as two and a half percentage points–adding to the largesse for the wealthy otherwise larding the legislation and making it even more obvious that the only Americans the Republican Party sees itself as serving are those with at least millions and probably billions of net worth.  The Republican charade of right-wing “alternative facts” (shown most clearly by the Treasury Secretary’s inability to provide a supported rationale for the absurd corporate and oligarch-favoring tax cuts) would have a destructive impact on the entire U.S. economy.  And it is not simplification–it is a huge complication that is ripe for tax abusers to abuse the complicated categories of differently taxed income.

Comments (4) | |

The Utterly Terrible GOP Tax “Reform” Scam

The Utterly Terrible GOP Tax “Reform” Scam

The Republicans in the House and Senate continue on their downhill rush to pass their so-called “tax reform” plan before the holiday break.  It’s a mad rush to nowhere, a corrupt process of “please the oligarch” that will cause a huge deficit increase (on the scale of $1 to $1.5 TRILLION over ten years) and be used by the Ryan, McConnell and Trump cadre of liars to justify a domino effect of Medicare, Medicaid, and Social Security cuts.  It is class warfare of the one percent against everyone else.  And it is being sold to the American people with a litany of falsehoods.

Almost all the provisions in the bill are designed to be generous to the ultra wealthy and stingy to the middle class and poor.

Corporations and their owners and managers–among the wealthiest people in the country–get the only permanent tax breaks.  It’s done in the name of competitiveness, but that’s bunk.  It essentially encourages corporations to continue to move profits out of the US because foreign profits are taxed at zero while US profits are taxed at 20%.  It pretends that the multiple tax breaks for big corporations are necessary (under disproven trickle-down and supply-side theories) to lead to more investment in business in the US and to more jobs and higher pay for workers.  But in fact corporations are enjoying record profits under current law and they aren’t using those record profits to pay their workers more or to create more jobs or even necessarily to invest in the US.  Mostly they are just doing share buybacks for shareholders (ie, owners/managers and other

Comments (4) | |

Treasury Secretary Mnuchin’s Forked Tongue on Tax Cuts for the Wealthy

Treasury Secretary Mnuchin’s Forked Tongue on Tax Cuts for the Wealthy

Shortly before the inauguration, Steve Mnuchin discussed the incoming administration’s tax plans and announced the Mnuchin Rule–that “[a]ny reductions we have in upper-income taxes will be offset by less deductions so that there will be no absolute tax cut for the upper class.”   EXCLUSIVE: Steve Mnuchin says there will be ‘no absolute tax cut for the upper class’, CNBC Squawk Box (Nov. 30, 2016).  At the same time, he argued that those who foresaw a tax cut for the rich accompanied by a tax increase for many in the middle class were wrong:  “When we work with Congress and go through this, it will be very clear.  This is a middle-income tax cut.” Id.

Contrast that with the so-called “tax reform” “framework” that the Trump administration has put out with the GOP establishment in Congress and for which both the House and Senate have made provisions in their budget document by including a (likely significantly underestimated) tax-cut-caused federal deficit of 1.5 trillion dollars.

As this blog and many tax and economic experts have noted (see, e.g., Nunns et al, An Analysis of Donald Trump’s Revised Tax Plan, Tax Policy Center (Oct. 18, 2016), Trump’s tax plan has always favored the wealthy.  In fact, the recently released “tax reform” “framework” is heavily tilted in favor of the wealthy, because the corporate statutory rate cut from 35% to 20%, the elimination of the AMT, the elimination of the estate tax, and the 25% pass-through rate for taxpayers all represent huge tax cuts for wealthy taxpayers who are the ones most likely to have been impacted by those tax provisions.  Meanwhile, there is actually an increase in rate for the lowest-income taxpayers from 10% to 12%, and the elimination of personal exemptions (and possibly other provisions) which may or may not be entirely offset by the proposed doubling of the standard deduction and possibly some increase in the child tax credit.  Thus, some poor families who can afford it least may pay more in taxes, middle income families may get a small tax cut, and wealthy families who don’t need the money at all will get a huge tax cut.  See, e.g.,  earlier A Taxing Matter posts on this issue here and here.

And these “massive” tax cuts for the wealthy, combined with massive increases in the deficit (and borrowing) to fund the tax cuts, likely won’t even trickle down as more jobs for working Americans.  There’s very little support from past tax cuts for businesses and for the wealthy for any kind of economic stimulus, either in terms of more jobs or higher wages.  See, e.g., White House math on corporate tax cuts is ‘absolutely crazy’, Mother Jones (Oct. 17, 2017).   In fact, there is much more support for tax increases on the wealthy resulting in more jobs than vice versa.

Comments (4) | |

The Times Handles the Trump Tax Cut Framework with Kid Gloves

The Times Handles the Trump Tax Cut Framework with Kid Gloves

There’s been a good bit written about the Trump tax cut framework released just over a week ago.  Most of it points out, as I have here and here, the absurdity of the claims by Trump and GOP spokespeople that this isn’t a tax cut aimed at benefiting the ultra wealthy.  After all, even with few details and no attempt to deal with the really tough issues that would face real tax reform considerations, it is awfully clear that almost everything in the package is designed to make the wealthy even wealthier.

Just a quick review of the way the proposed tax cuts exclusively or primarily benefit the ultra wealthy:

  • elimination of the estate tax, which taxes fewer than 2% of the estates, those that have in excess of $11 million (the couples’ exempt amount) and haven’t used the various trusts and family partnerships to let even more estate value escape tax through valuation gimmicks
    • Not waiting on the tax cut proposal, Trump’s Treasury secretary Steve Mnuchin announced in “Second Report to the President on Identifying and Reducing Tax Regulatory Burdens” (Oct. 2, 2017) a current step to let wealthy people continue to use valuation gimmicks to avoid a fair estate tax, through withdrawal of the Obama Administration’s proposed regulation under section 2704 that would disregard the purported restrictions on certain family-controlled entities in setting estate valuations–a regulation clearly merited because of the ridiculous scams of putting assets in family partnerships in order to claim that they are worth 1/3 of their actual value, even though the partnership can be dissolved afterwards with the full value magically returning.  (I’ll deal with the regulatory changes in my next post.)
  • elimination of the AMT, which imposes tax when the taxpayer would otherwise benefit from a surfeit of regular income tax subsidies (loopholes, tax expenditures, deductions, credits).  For a thorough analysis of the AMT, see A Taxing Matter series of 6 posts, beginning here.
  • reduction of the statutory corporate tax rate for the largest corporations from 35% to 20%, which benefits primarily the highly compensated managers (who receive substantial amounts of stock options as part of their compensation) and big shareholders (who tend to be mainly the ultra wealthy who own most of the financial assets) and does little or nothing to help small businesses, that already pay tax rates of 25% or less
  • creation of a single 25% rate for recipients of all business pass-through income (i.e., from partnerships), which benefits almost exclusively the ultra rich, since small business income is already taxed at 25% or less, while wealthy partners in real estate firms would be taxed at the highest individual rate under current law on their pass-through income, and
  • creation of full, upfront expensing, resulting in a non-economic windfall to businesses that will, again, mainly just increase profits passed on to their wealthy owners. (Although this is purportedly a five-year provision, everybody knows that is just a gimmick to pretend that its impact on the deficit is less than would be admitted if it were permanent.  Everybody also knows that the intent is to make it permanent.)

But there are always journalists who try a little too hard to give obviously bad tax ideas a surface claim to reasonableness.  Apparently, even James Stewart, who writes “common sense” entries for the business section of the New York Times, suffers this vulnerability.  See, for example, his “Tax Cuts are Easy, but a Tax Overhaul?  Three Proposals to Make the Math Work,” New York Times (Oct. 6, 2017), at B1 (digitally titled “Tax Reform that doesn’t bust the budget? I’ve got a Few Ideas, Oct 5, 2017).

I like the print title better, since the Trump Plan has clearly already ditched any real idea of “tax reform” for a wholesale attempt at trillions of dollars of tax cuts mostly benefiting the rich.   There are other things that aren’t so good about the article.

1) Stewart calls the Trump giveaway to the rich “the most ambitious attempt at tax reform in over 40 years.”  That’s simply not correct, because it isn’t an attempt at tax reform and it isn’t really ambitious.

  • Ambitious? How can Stewart call a grab-bag of all the old GOP cuts-for-the-rich gimmicks “ambitious.”  Unless he thinks that conning typical Americans who don’t understand much about taxes into thinking that this is a populist tax reform intended to help the middle and lower income classes and not drop more riches on the already rich makes it ‘ambitious’…..
  • Tax reform?  This isn’t tax reform; it’s just a series of tax cuts.  The framework leaves any thinking about tax reform for somebody else to do–which means it really isn’t intended to happen at all.  Later in the article Stewart quotes Holtz-Eakin (right-wing tax cut advocate) and Kevin Brady (same) about the “ambitious” framework.  They’re gung ho.  Brady says it’s ambitious because they are trying to do what the 1986 reform  effort did in several years in only a few months.  Nope–they are not trying to do what the 1986 reform did.  The 1986 reform was a fully bipartisan effort in both the House and Senate, with  Packwood in the Senate and Rostenkowski  in the House leading lengthy hearings and in-depth study of issues, along with a responsible and active Treasury and CBO providing in-depth analysis of impacts.  Trump and the GOP now intend to pass a tax cut for the rich with only GOP support (unless Trump can bully some election-vulnerable Democrats into going along with the travesty).  And they don’t intend the kind of exhaustive study and consideration that would provide real information on who would benefit and who would be hurt.  We’ve already heard that some GOP want to pay an outside (GOP-friendly) consultant to do the “dynamic scoring” and not the CBO, because they want to be sure that it predicts plenty of growth (a number that is easily manipulable, which is why ‘single score dynamic scoring’ is utterly absurd).

Comments (4) | |

The Tax-Cut Framework Won’t Create Jobs and Digs the Inequality Ditch even Deeper

The Tax-Cut Framework Won’t Create Jobs and Digs the Inequality Ditch even Deeper

Marcus Ryu, a self-described Silicon Valley entrepreneur who created, with others, a company now worth $5 billion on the New York Stock Exchange, argues in today’s Op-Ed section of the New York Times that “Tax Cuts Won’t Create Jobs“, NY Times (Oct. 9, 2017), at A23 (the title in the digital edition is different from the print title:  Why Corporate Tax Cuts Won’t Create Jobs).  He is right.

The tax cuts proposed in the framework set out by the Trump administration and Republican leaders in Congress claims to be pursuing economic growth that will benefit ordinary people (Trump’s purported base).  These claims are based in part on claims that  U.S. taxpayers (individual, corporate and individual who owns businesses through partnerships) are much more heavily taxed than taxpayers in other advanced countries.  Trump often points to the statutory tax rate for corporations (35%), which is higher than the statutory rate in most other advanced countries. But Trump usually ignores the fact that the vast majority of corporations (including very profitable U.S. multinationals) pay no or much lower taxes, in part because of the many loopholes and deductions that reduce the income that is taxed.  When one considers the nation’s GDP and the percentage of GDP paid in taxes, it is quite clear that the U.S. is actually one of the lowest taxed of developed countries, which often have income taxes, corproate income taxes and value-added taxes (which the U.S. does not have), as well as specialty taxes such as financial transaction taxes (which the U.S. does not have).  See, e.g., Business Insider, Is the U.S. the highest taxed country? (Sept. 6, 2017).

“[T]he most comprehensive measure by which to judge Trump’s claim, combining corporate and individual taxes paid, is tax burden as a percentage of gross domestic product. It compares how much money in a country is put toward taxes with the economic output of the country.  By this measure, the US has the fourth-lowest tax burden of any OECD country, with only South Korea, Chile, and Mexico ranking lower.” [emphasis added]

Trump has claimed that the proposed cuts in the Trump tax-cut “reform” framework don’t benefit the wealthy and don’t benefit him but are for the middle class and those with less wealth and income.  The only way that claim would work would be if tax cuts that are clearly targeted at the rich (elimination of the estate tax, elimination of the AMT, drastic cut in the rate at which wealthy partners pay taxes on partnership income shares, drastic cut in the corporate tax rate  when most of the benefit of tax cuts to corporations is used to pay dividends or do share buybacks for the wealthy managers and shareholders) had such a dramatic impact on overall economic growth and on sharing of the benefit of the tax cuts with ordinary workers that it made up for the fact that almost all of the benefit goes directly to the very wealthy and almost all of the negative impact (via additional borrowing and deficits) will result in fewer benefits from the poor.  That positive balance is so unlikely from these tax-cuts-for-the-rich that they appear to be just another of the many Trump lies intended to mislead the American people.  See, e.g., Business Insider, Trump tax reform plan just got its first brutal review showing how it would benefit the rich and almost no one else (Sept.  2017) (noting that “Americans among the top 1% of earners would see the bulk of the plan’s benefits, while lower- and middle-class Americans — even most upper-class people — would see few benefits,” citing the Tax Policy Center’s study of the framework).

Comments Off on The Tax-Cut Framework Won’t Create Jobs and Digs the Inequality Ditch even Deeper | |

Part of Patriotism is Paying Taxes

Part of Patriotism is Paying Taxes

As Americans, we pay taxes to allow our government to support important activities that we as individuals or individual businesses either can’t do at all or can’t do as successfully.  Both individuals and businesses benefit from government, so that paying taxes is a wonderful exercise in patriotism.

For individuals, the idea of paying taxes as patriotism may be obvious to many of us, because we think that taxes are an obligation of citizens to support and pay for the many things that the government does that we cannot do ourselves, from running a military defense system to supporting basic research into diseases, helping people and cities and states hit by natural disasters (like Texas and Florida and Puerto Rico), supporting education and research that leads to innovation and economic growth, helping to fund changeovers from dying industries like coal to new and growing industries like solar and wind, preserving areas of public lands for the public rather than allowing them to be decimated by private industry and fossil fuel extraction, preventing huge multinational companies from gouging consumers or polluting our water, land, and air, and the many other things that the government does for the benefit of all Americans.

But the far right in this country has been preaching the opposite for years.

  • There’s a good bit of hypocrisy there, because when Sec. of Health Price (now fired) or current Sec. of Treasury Mnunchin or current EPA Director Scott Pruit wants a comfortable private ride (like Pruitt’s many trips back to Oklahoma to talk to industry magnates one-on-one without any public information, and then de-regulate on their behalf), they love that they can make a slim excuse and take a military jet at the cost of hundreds of thousands of U.S. taxpayer dollars.   Or, like Pruitt, have a “sound-proof room” built for himself (first EPA administrator who thinks he needs it) so he can talk to his industry buddies about how to un-protect the environment without any Americans ever finding out about it.
  • Far right media personalities have made a killing by arguing for tax cuts (that mostly benefit the rich like them) and government shrinkage (of programs that they think they won’t use).
    • Grover Norquist wants taxes to be low because he wants to “shrink the government and drown it in a bathtub.”  That idea has proliferated on the right to many of the programs that are directed to help the most vulnerable amongst us, such as Medicaid, and to programs that exist to help ensure the Americans of all ages and backgrounds enjoy the right to access to health care and decent standard of living in retirement, through Medicare and Social Security. Not surprisingly, Norquist has stated that including a VAT in the U.S. system would be “like shards of glass on a pizza” (see this link) –even though almost every developed country has a VAT as well as an income tax (which is one of the reasons that the comparisons of corporate tax rates is so misleading–it is comparing apples (only an income tax) to oranges (an income tax AND a VAT and usually other taxes as well, such as financial transaction taxes).
    • Rush Limbaugh supports Trump’s tax-cuts-for-the rich ideas.  See “What I was Told About the Trump Tax Plan–and What I Think About It“, The Rush Limbaugh Show (Sept. 28, 2017).  He spouts one falsehood after another about them:  that they are not trickle-down (of course they are), that they aren’t harmful for the poor (of course they are); that they will allow 99% of Americans to file their tax forms on a postcard just because the framework reduces the number of tax rates (absurd:  reducing the number of tax rates  has just about nothing to do with reducing the complexity of the Code for the vast majority of American taxpayers, who already file a simple form because they have mainly wage income that is withheld at the source).  And  no matter how much Rush Limbaugh claims that reducing the corporate tax rate, creating a low tax rate for partnership pass-through income, getting rid of the estate tax and getting rid of the AMT aren’t benefits for the rich (because, he says, Trump has insisted that the changes aren’t supposed to benefit him), the fact is that they are benefits for the rich and the Trump clan clearly will especially benefit, probably to the tune of hundreds of thousands annually and billions upon Trump’s death.  Limbaugh is quite simply just plain wrong.  Because, you see, although rates matter (and we should have a top tax rate much HIGHER than our current top tax rates), the changes that the GOP Six are proposing in the framework are specifically intended to, and do, provide enormous tax cuts to the ultra wealthy.  That’s because the marginal statutory rate is just one piece–the real question is what gets taxed, i.e., how is the “taxable income” amount calculated and what special loopholes are built in to benefit the rich (like the 25% partnership pass-through rate).

Comments (9) | |

Right Wing Propaganda Tank IPI Likes the Trump Tax-Cuts-for-the-Rich “framework”

Right Wing Propaganda Tank IPI Likes the Trump Tax-Cuts-for-the-Rich “framework”

There’s no surprise here.  The Institute for Policy Innovation (IPI) is a right-wing “think” (i.e., propaganda) tank that has consistently argued for tax policies that favor multinational corporations and the wealthy.  So IPI has a posting on Sept 29 that is supportive of the so-called “tax reform framework” put out by the Trump administration.

As an earlier post noted here, the Trump framework is a wish list for the wealthy, providing one tax cut for the ultra rich after another:

  • elimination of the estate tax (that only affects the heirs of estates worth more than $11 million);
  • territoriality (that advantages multinational corporations that actually operate from the U.S. but claim headquarters in low-tax jurisdictions);
  • a flat 25% rate on “pass-through income” that gives almost a 15% rate cut to wealthy owners of partnerships in the real estate, joint venture, oil and gas and other businesses (and affects very few true small business owners whose effective tax rate is already no more than 25%, if that much);
  • elimination of the top rates on the progressive individual rate structure (reducing the top rate from 39.6% to 35% (or less));
  • reducing the statutory rate for corporations to a low 20%, when corporations already pay much much less in taxes than they have generally paid under the income tax system while making record profits and paying their key managerial personnel the kind of salaries and percs that have exacerbated the increasing income inequality gap in the U.S.;
  • elimination of the Alternative Minimum Tax (AMT), a provision that was enacted to ensure that wealthy taxpayers are not able to use so many loopholes and special provisions that they escape taxation altogether on their income (the elimination of the AMT being a pro-wealthy tax cut that ordinary folk in the lower two-thirds of the income distribution will benefit not one whit from); and
  • permitting immediate expensing for five years of equipment and similar expenditures by businesses (another provision that will allow mega corporations to make even more profits that can be shared–through bonuses, higher salaries, and share buybacks with the wealthy managers and shareholders of the enterprise and a provision that runs explicitly counter to the actual economics of the business, in which new equipment stays at close to original value in the early years with wear and tear actually economically backloaded onto the last years of the useful life).

As a result of these provisions, the wealthy who own the vast majority of financial assets (including stock in corporations and partnership interests in real estate and other partnerships) will enjoy hundreds of thousands of dollars of tax cuts.  In fact, the major portion of the tax cuts will go to the very wealthy who need them least.

Comments (6) | |

Trump’s Refusal to Release His Own Tax Returns and California’s Legislature

Comments (1) | |

Trump’s “Give the Rich a Break” Tax Plan

Trump’s “Give the Rich a Break” Tax Plan

National GOP leaders on Wednesday released a 9-page document that they called a tax “framework” (available here on the Washington Post site) describing in vague terms how they intend to cut taxes for the nation’s wealthiest people while doing very little that serves the government needs. Overall, the GOP framework would amount to about $2.2 TRILLION in less revenue to support federal programs (like protecting the environment from corporate pollutants, supporting higher education loans for students, funding basic university research) (assuming $5.8 trillion loss to lowering rates and shift to territorial system and maybe $3.6 trillion recouped by eliminating as yet unspecified deductions).  See GOP proposes deep tax cuts, provides few details on how to pay for them, Washington Post (Sept. 27, 2017).

  • They promise 3 rates (12%, 25% and 35%, without stating what the applicable income brackets for those rates should be).  That lowering of rates is primarily beneficial to the wealthiest, since the people who just barely get by on their wages (especially with the new corporate regime of calling people in for short shifts, as needed, rather than paying them a regular full-time job) are hit hardest by the payroll taxes that won’t be lowered at all under this plan.  That is, ordinary wage-earners in the middle and lower classes are generally already taxed on a consumption basis–they spend what they earn and have little left for saving for the future.  They pay relative low income taxes but pay significant payroll taxes through withholding on their wages (with no deferral).  This is another excursion into the current GOP’s ‘alternative fact’ universe, where huge tax cuts mainly benefiting the wealthy are sold as a ‘simplifying’ reform that will benefit ordinary people.

 

  • Although the lowest rate is higher than the poorest wage-earning taxpayers pay now, the planners claim that this is still a tax cut because of the “doubling” of the standard deduction for those taxpayers that do not itemize.  However, the personal exemptions are eliminated, so that the combination of the standard deduction and the higher rate is likely to be at best a minimal cut for small families and an actual tax increase for larger families.  See, e.g., this article.

 

  • They promise to eliminate the “alternative minimum tax”, a tax provision that was enacted as a safety provision to ensure that wealthy taxpayers who can afford tax planning and generally can most easily benefit from the various loopholes and tax subsidies written into the code would pay some modicum of taxes rather than get off scott-free from any tax burden. The “framework” (page 5) claims that “it no longer serves its intended purpose and creates significant complexity.”  It is admittedly somewhat complex, but not unduly so with modern tax preparation software which makes that complexity a minimal problem.  I have been required to pay the AMT, and it hasn’t made my life or tax return filing more complex.  In fact, the people who owe the AMT should be paying more tax than they would pay without the AMT, and that means it is in fact serving its intended purpose of ensuring that taxpayers cannot aggregate too many of the various haphazard subsidies in the Code to permit them to essentially escape a reasonable tax burden on their economic income.  Elimination of the AMT is a tax break for the well-to-do:  Trump, for example, has had to pay the AMT (real estate developers are one of the much-favored groups in terms of various tax expenditures in the Code that benefit them).

Comments Off on Trump’s “Give the Rich a Break” Tax Plan | |