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Post 04 Dec 2017, 8:41 am

A few pages ago we talked about the repatriation as a result of a one time tax holiday. During the Bush years it was at 5% but under both the Senate and House plans the one time tax rate is 14.5% and 14% respectively. This is no where near as generous to Corporations as the Bush plan and good tax policy. With rates coming down to 20%, this is still a good deal and corporations understand that if they don't take advantage of the 14% rate it will go away.

Current estimates are that there are $2.6 trillion held overseas by the 1,000 largest public companies. There are also private companies that could be doing this.

The resulting influx to treasury should be over $200 to $300 billion (some may not repatriate) which is not a bad days' work. To Freeman's critique that the money will just go to pay CEOs, dividends, and share buyback, my response is that all 3 of those are taxable events. So that could be over $1 trillion of additional income at various tax rates. (The share purchase cap gains would not all be income because it depends on basis and where the shares are held. Similarly dividends in retirement accounts would not yet be taxable.)

These facts are not reported in the media or on my Facebook feed which is running against the tax plan 100 to 1.

BTW, I analyzed my own tax situation this weekend and our taxes increase by $300 under the new plan. Losing or reducing our state tax deduction is a big deal for this Mass. resident and counteracts the other positive changes. I'm still for the plan because of the positive corporate changes which people just don't understand or don't want to understand or there's always the chance that I am wrong :) .
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Post 04 Dec 2017, 9:12 am

Hmm...seems like the best bet is to look at what happened during the 2004 tax holiday, right?

At that that time there was about eight hundred billion held overseas. 362 billion was brought back. 312 qualified for the tax break. So the treasury got about 18 billion dollars.

So less than half of the money was brought back, at a time when the difference between the one-time rate of 5.25% and the normal rate of 35% was massive. Now, we have a very modest difference between 14 and 20 percent I think it is reasonable to assume that there will be a much lower rate of return as companies will wait for more generous terms. Companies for the most part don't need to bring this money for operational reasons, so they can afford to wait this out. It's hard to guesstimate how much will be brought back but 6% tax cut seems like peanuts. 500 billion seems high but if that happened 70 billion would be collected. It could be much, much lower than that. My guess we'll get 25 billion. An accountant would be embarrassed to only get a 6% reduction.

And of course we know what corporations will do with the money and that it will not create jobs and it will have little economic impact. 10 of the 15 companies that brought back the most money last time...cut jobs.

https://mobile.nytimes.com/2008/06/24/b ... oogle.com/
https://www.google.com/amp/s/www.cbsnew ... -not-work/
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Post 04 Dec 2017, 11:32 am

Ray Jay wrote:BTW, I analyzed my own tax situation this weekend and our taxes increase by $300 under the new plan. Losing or reducing our state tax deduction is a big deal for this Mass. resident and counteracts the other positive changes. I'm still for the plan because of the positive corporate changes which people just don't understand or don't want to understand or there's always the chance that I am wrong :) .


So glad you did this. I have not yet, but I should. What would you think about just throwing out the individual portion of this while keeping the corporate? Isn't most of the stuff people don't like in the changes for individuals?
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Post 04 Dec 2017, 12:14 pm

geojanes wrote:
Ray Jay wrote:BTW, I analyzed my own tax situation this weekend and our taxes increase by $300 under the new plan. Losing or reducing our state tax deduction is a big deal for this Mass. resident and counteracts the other positive changes. I'm still for the plan because of the positive corporate changes which people just don't understand or don't want to understand or there's always the chance that I am wrong :) .


So glad you did this. I have not yet, but I should. What would you think about just throwing out the individual portion of this while keeping the corporate? Isn't most of the stuff people don't like in the changes for individuals?


Yes; the corporate stuff is necessary. The individual stuff is just picking winners and losers ... it depends on 100 different tax attributes, but basically the bills help the wealthy in red states and hurt the wealthy in blue states. At some point the Dems will take back power and rejig the individual provisions, while hopefully keeping the corporate reform.
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Post 04 Dec 2017, 12:28 pm

fate
How much do “the working poor” pay in income taxes now? Go ahead. Tell us.


All told, those in the bottom fifth of earners pay almost a fifth of their income in taxes. According to the Institute on Taxation and Economic Policy, the lowest-income quintile — those making less than $19,000 a year — pay almost 11 percent of their income in state and local taxes. Working people, even if they don’t make enough money to pay federal income tax, also pay payroll taxes that contribute to Social Security and Medicare. And anyone who drives a car pays gas taxes. The old cliché really does hold true — the only thing as inevitable as death are taxes.

One fifth of one’s income would be a lot for anyone. But for a low-income family struggling to get by, those costs really add up. “When I go to the store, I’m pinching pennies all the time because we never have enough food and everything,” said one woman in Ohio when I asked about the sales tax. If one’s fiscal contributions are measured in the hardship they impose, the poor are paying dearly.

https://www.pbs.org/newshour/economy/co ... ably-think
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Post 04 Dec 2017, 12:40 pm

Freeman:
At that that time there was about eight hundred billion held overseas. 362 billion was brought back. 312 qualified for the tax break. So the treasury got about 18 billion dollars.


The treasury directly got about $18B ... but what about the indirect amounts. The remaining $350B went somewhere.

Freeman:
An accountant would be embarrassed to only get a 6% reduction.
Not me. Honestly saving your client money without audit risk is very much appreciated. The future tax liability is often removed from the balance sheet in these situations.

Freeman:
And of course we know what corporations will do with the money and that it will not create jobs and it will have little economic impact. 10 of the 15 companies that brought back the most money last time...cut jobs.


Correlation is not the same thing as causation.

BTW, I'll save Fate the time and advise that Ricky's comment is silly. The federal government is not responsible for regressive state income and sales taxes. There is an EITC to refund the payroll taxes for low income people. There's also a child tax credit.
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Post 04 Dec 2017, 12:44 pm

rickyp wrote:fate
How much do “the working poor” pay in income taxes now? Go ahead. Tell us.


All told, those in the bottom fifth of earners pay almost a fifth of their income in taxes. According to the Institute on Taxation and Economic Policy, the lowest-income quintile — those making less than $19,000 a year — pay almost 11 percent of their income in state and local taxes. Working people, even if they don’t make enough money to pay federal income tax, also pay payroll taxes that contribute to Social Security and Medicare. And anyone who drives a car pays gas taxes. The old cliché really does hold true — the only thing as inevitable as death are taxes.

One fifth of one’s income would be a lot for anyone. But for a low-income family struggling to get by, those costs really add up. “When I go to the store, I’m pinching pennies all the time because we never have enough food and everything,” said one woman in Ohio when I asked about the sales tax. If one’s fiscal contributions are measured in the hardship they impose, the poor are paying dearly.

https://www.pbs.org/newshour/economy/co ... ably-think


But those aren't federal income taxes, Ricky. If you're low income, you usually don't pay any federal income tax. Indeed, they often get a tax credit so that they get paid when they file. All the things you write are true, but I don't know how the relate to the tax plan that's being considered.
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Post 04 Dec 2017, 12:46 pm

rayjay
Current estimates are that there are $2.6 trillion held overseas by the 1,000 largest public companies. There are also private companies that could be doing this.

They aren't bringing the money back to the US purely because they want to avoid paying tax.
The largest reason is, they don't know what or where to invest next...
If they repatriate profits and then find that their next big investment is in India, or Singapore ... they've paid the US tax unwisely.
That they aren't bringing the money back is largely because there isn't an obvious need for the money to be invested in the US.
And because some markets outside of the US, are more attractive for investment.
Hoarding cash (usually in the form of US treasury notes) is an unusual practice, only because the world of commerce hasn't been where it is right now. Having a lot of cash is good for companies like Google, ($80 billion) who want to quickly acquire any emerging technologies. ((And scare off competitors)
GM has a lot of cash too. Perhaps they will need to repatriate some money for retooling factories, but as a world wide manufacturer they won't repatriate and incur taxes until they are certain.
And that's a problem. Who knows what the next big idea will be? One things for certain, a lot of the cash being hoarded is because the executives of those companies are waiting to figure that out before they move..
And no holiday on tax for repatriated money is going to seriously affect hoarding for that reason.
People make the mistake of thinking taxes are an over riding reason why companies make business decisions. Its really not that important. Getting the investment decision right is paramount.
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Post 04 Dec 2017, 12:51 pm

rayjay
BTW, I'll save Fate the time and advise that Ricky's comment is silly. The federal government is not responsible for regressive state income and sales taxes. There is an EITC to refund the payroll taxes for low income people. There's also a child tax credit


It doesn't matter who you paid the taxes to Ray. The moneys gone. Its pretty silly to differentiate on which government is raking it in..

Institute on Taxation and Economic Policy, the lowest-income quintile — those making less than $19,000 a year — pay almost 11 percent of their income in state and local taxes.


Fates comment was a question that was supposed to cast some doubt on the analysis provided that clearly indicates that the current tax bills shift the burden from the wealthy to the working poor and middle class.
Unless you or he have something more substantive than his drive by comment I assume you accept that that is a factual claim?
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Post 04 Dec 2017, 1:11 pm

Ricky:
It doesn't matter who you paid the taxes to Ray. The moneys gone. Its pretty silly to differentiate on which government is raking it in..


Are you trying to speak like a poor person? It certainly is worth differentiating when you are discussing federal tax policy.
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Post 04 Dec 2017, 4:44 pm

rickyp wrote:fate
How much do “the working poor” pay in income taxes now? Go ahead. Tell us.


All told, those in the bottom fifth of earners pay almost a fifth of their income in taxes. According to the Institute on Taxation and Economic Policy, the lowest-income quintile — those making less than $19,000 a year — pay almost 11 percent of their income in state and local taxes. Working people, even if they don’t make enough money to pay federal income tax, also pay payroll taxes that contribute to Social Security and Medicare. And anyone who drives a car pays gas taxes. The old cliché really does hold true — the only thing as inevitable as death are taxes.

One fifth of one’s income would be a lot for anyone. But for a low-income family struggling to get by, those costs really add up. “When I go to the store, I’m pinching pennies all the time because we never have enough food and everything,” said one woman in Ohio when I asked about the sales tax. If one’s fiscal contributions are measured in the hardship they impose, the poor are paying dearly.

https://www.pbs.org/newshour/economy/co ... ably-think


Slick, but non-responsive. I will use shouting to help you:

How much do “the working poor” pay in INCOME] taxes now?


You won't answer directly, of course, because the answer is "ZERO."

So, this is not a transfer of wealth from the working poor to the rich.
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Post 04 Dec 2017, 4:53 pm

rickyp wrote:It doesn't matter who you paid the taxes to Ray. The moneys gone. Its pretty silly to differentiate on which government is raking it in..


This is foolish.

It's a Federal tax bill. Of course, it matters to which government the taxes are going! The Federal government cannot cut State and local taxes.

Institute on Taxation and Economic Policy, the lowest-income quintile — those making less than $19,000 a year — pay almost 11 percent of their income in state and local taxes.


Fates comment was a question that was supposed to cast some doubt on the analysis provided that clearly indicates that the current tax bills shift the burden from the wealthy to the working poor and middle class.
Unless you or he have something more substantive than his drive by comment I assume you accept that that is a factual claim?


Except, the bill does nothing of the sort. You either cannot comprehend English, or are lying, which is it?
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Post 05 Dec 2017, 8:08 am

Fate
How much do “the working poor” pay in INCOME] taxes now
?
So you now recognize that they pay taxes? And you want to talk about ONLY federal income tax?
At what point does someone drop from middle class to working class Fate? What income level?
Once you determine that we can actually look at data that shows how much tax they pay. Only the Poor pay no federal income tax...

Fate
You won't answer directly, of course, because the answer is "ZERO."
So, this is not a transfer of wealth from the working poor to the rich
.

And yet you offer no evidence of this...
Here's what you are trying to refute ...

Congress’s own think tanks — the Joint Committee on Taxation and the Congressional Budget Office — calculate that in 10 years, people making between $50,000 and $75,000 (around the median income in the United States) would effectively pay a whopping $4 billion more in taxes, while people making $1 million or more would pay $5.8 billion less under the Senate bill. And that doesn’t take into account the massive cuts in services, health care and other benefits that would likely result
.

If the tax plan forces cuts to services in health care, and other benefits that the poor and working poor receive ...while the rich save $5.8 billion, then that is a wealth transfer.

As for the middle class? (represented here by people earning between $50 and $75 K) The Committee says that they'll be paying $4 billion more in taxes. (Note that they are still in the same income range.) Those making more than $1 million pay $5.8 billion less.
More for the wealthy. less for the middle class.....
Or do you have evidence or an authority different than this joint committee that offers a different analysis?
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Post 05 Dec 2017, 9:08 am

Rickyp, when you don’t have facts on your side, you resort to throwing crap against the wall. Of course, that explains 99% of your posts.

45% of Americans pay no Federal Income Taxes. https://www.@#$!.com/story/45-of ... 2016-02-24

I “only” want to talk about Federal Income Taxes because . . . Congress is working on legislation that will affect . . . Federal Income Taxes—and you claimed it was a transfer of wealth from the working poor to the rich.

Let me make this simple enough for even you to grasp: if someone does not pay FIT, a change in the FIT law which still causes them to pay no income tax cannot transfer their wealth to someone else.

To make it really simple: 0+0= 0

Look it up. It’s true.
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Post 05 Dec 2017, 11:25 pm

A hiccup in the tax bill. California House Republicans don't like the provision getting rid of state deductions. Big surprise. Their constituents hate it.

https://www.google.com/amp/s/www.washin ... story.html