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Trump Wants Tax Plan to Cut Corporate Rate to 15%

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Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#31

Post by snowpanda »

nodesocket wrote: post #2

The thing that most people fail to realize is that a lower corporate tax rate helps the overall enconomy and all Americans. Companies now suddenly have increased capital to spend on growth (hiring, R&D, and acquisitions). Additionally it boost earnings which will likely increase most people's retirement accounts and stock portfolios. Typical that I'm getting downvoted without any rebuttal.

Wow looks like you triggered half of HN with basic economics.

You'd think people disagreeing with you would love Venezuala. But nobody is moving there. So odd.

Economics never lie... https://i.imgsafe.org/e594388497.png

Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#33

Post by civilian »

djtriptych wrote: post #5
nodesocket wrote: post #2

The thing that most people fail to realize is that a lower corporate tax rate helps the overall enconomy and all Americans. Companies now suddenly have increased capital to spend on growth (hiring, R&D, and acquisitions). Additionally it boost earnings which will likely increase most people's retirement accounts and stock portfolios. Typical that I'm getting downvoted without any rebuttal.

Right because GE builds roads and funds public schools.

That's a mischaracterization of his argument. He's saying that a lower corporate tax rate would help grow companies, and the economy as a whole. We would continue to pay income and payroll taxes (which are the main source of tax income anyway), and that the benefits of a larger economy + more income/payroll tax income would offset the lowest revenue in corporate taxes.

Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#34

Post by pavlov »

nodesocket wrote: post #2

The thing that most people fail to realize is that a lower corporate tax rate helps the overall enconomy and all Americans. Companies now suddenly have increased capital to spend on growth (hiring, R&D, and acquisitions). Additionally it boost earnings which will likely increase most people's retirement accounts and stock portfolios. Typical that I'm getting downvoted without any rebuttal.

You're getting downvoted because you pretend that a neoliberalist trope ("lower corporate tax rate helps everyone") which has been beaten to death over the past 40 years is something that "most people fail to realize".

Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#35

Post by JKCalhoun »

harryh wrote: post #29
JKCalhoun wrote: post #24

Earlier quoted context omitted.

Then that is what the AMT was designed for, no?

No. The AMT is completely unrelated to the issue abhv brings up. The AMT is essentially a 2nd tax code for individual income taxes were fewer deductions but also lower rates. Individuals compute their personal taxes both ways and pay the higher of the two systems. It's kind of a crazy system.

But that's kind of what I mean — if you were using your business as a "deduction" hopefully the alternate computation would ignore that and you would be in for the higher (and deserved, IMO) bracket.

Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#36

Post by ska »

harryh wrote: post #27
abhv wrote: post #18

Lower corporate taxes can also help create structures which allow wealthier people to avoid taxes. For example, if you can create a structure in which all of your consulting income + capital-asset income goes into a C-corp, and you pay most of your own expenses through the C-corp (e.g., Trump tower home office), then you can keep most of your income taxed at only 15%. The C-corp holds it forever, and pays your expens…

The IRS is not stupid. It's perfectly capable of distinguishing a real business from a dummy business set up just to pay personal expenses. There are all kinds of rules about this sort of thing.

The IRS is not stupid, but wealthy enough people have been very effective at creating and exercising approaches to bring their marginal tax rates down to impressively low numbers.

So if the IRS is smart but this still happens a lot, there must be something else at work, no?

Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#37

Post by WJW »

xmj wrote: post #23
frebord wrote: post #13

Earlier quoted context omitted.

Shareholder's are investors, investors invest.

Then why insist on dividends, and not have companies reinvest?

Because they might want to diversify into areas other than where the company operates in?

Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#38

Post by mmanfrin »

technotony wrote: post #8

I think the big thing about this is that it will lead more companies to bring capital back to the US from overseas where they are hoarding it. If they either spend it or distribute it to Americans that's likely good for the economy. It also improves the IRR for projects, which should lead to more investment. Hopefully, it works to get the economy going.

15% is still 15% compared to the 0% they pay on money funneled to tax havens.

A lower rate won't stop this; a closing of the loophole will.

Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#39

Post by [deleted] »

harryh wrote: post #27
abhv wrote: post #18

Lower corporate taxes can also help create structures which allow wealthier people to avoid taxes. For example, if you can create a structure in which all of your consulting income + capital-asset income goes into a C-corp, and you pay most of your own expenses through the C-corp (e.g., Trump tower home office), then you can keep most of your income taxed at only 15%. The C-corp holds it forever, and pays your expens…

The IRS is not stupid. It's perfectly capable of distinguishing a real business from a dummy business set up just to pay personal expenses. There are all kinds of rules about this sort of thing.

[deleted]

Re: Trump Wants Tax Plan to Cut Corporate Rate to 15%

#40

Post by harryh »

JKCalhoun wrote: post #35
harryh wrote: post #29

Earlier quoted context omitted.

No. The AMT is completely unrelated to the issue abhv brings up. The AMT is essentially a 2nd tax code for individual income taxes were fewer deductions but also lower rates. Individuals compute their personal taxes both ways and pay the higher of the two systems. It's kind of a crazy system.

But that's kind of what I mean — if you were using your business as a "deduction" hopefully the alternate computation would ignore that and you would be in for the higher (and deserved, IMO) bracket.

There is no deduction for "a business" in the way you describe. That's....not how it works.
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