Little Marco admits Republican tax bill went too far helping corporations

Story here.

Great. But he still voted for it. 

No Profile in Courage Award for you, mister.

Tax Policy Center expects charitable giving to drop by $13 to $20 billion annually because of Republican tax reform

Way to go, Brownie!

Discussed here.

Read it and weep: "The move to a territorial system opens the barn doors wide to corporate offshoring"

Read all about the new giant sucking sound, here.

Once again in the dead of night Senate Republicans pass tax reform for multinational corporations

The New York Times, here:

The Senate approved the bill early Wednesday morning.

The Senate voted 51 to 48, with no Republican defections and no Democratic support.

Under the final tax bill, the corporate tax rate would fall to 21 percent, from the current 35 percent, a move that Republicans are betting will increase economic growth, create jobs and raise wages. Individuals would also see tax cuts, including a top rate of 37 percent, down from 39.6 percent. The size of inheritances shielded from estate taxation would double, to $22 million for married couples, and owners of pass-through businesses, whose profits are taxed through the individual code, would be able to deduct 20 percent of their business income.

But the individual tax cuts would expire after 2025, a step that Republicans took to comply with budget rules, which do not allow the package to add to the deficit after a decade.

Republican tax reform for multinational corporations passes US House 227-203-2

The New York Times has the roll call, here.

Just 12 Republicans voted "No", most from states hurt by the $10,000 cap for deductibility of state, local and property taxes:

CA-48

Dana Rohrabacher

N

CA-49

Darrell Issa

N

NC-3

Walter B. Jones

N

NJ-2

Frank A. LoBiondo

N

NJ-4

Christopher H. Smith

N

NJ-7

Leonard Lance

N

NJ-11

Rodney Frelinghuysen

N

NY-1

Lee Zeldin

N

NY-2

Peter T. King

N

NY-11

Dan Donovan

N

NY-19

John J. Faso

N

NY-21

Elise Stefanik

N

Taxes are about precise numbers, which means Rush Limbaugh will make you cringe

He just said Ronald Reagan lowered the top marginal rate from 90% in the 1981 tax reform.

He didn't. John F. Kennedy lowered the top rate from 90% to 70%.

Reagan lowered the top rate from 70% to 50%.

Just about everything Rush says about taxes is imprecise, and wrong, including about what he has no excuse for not knowing, namely taxes under his hero Reagan.

But hey, he can't even get the old chestnut "whose ox is gored" correct. Today it's the goose getting gored, or something.

Take another pill, Rush. Just one more hour to go before you're off for two weeks.

Update: My bad. Rush will be back tomorrow, to celebrate the tax bill passing.

Republican tax "reform" will make it harder for you to move, eliminating the relocation deduction

Reported here:

Are you thinking of moving across the country for a new career opportunity? If so, the tax bill won't let you deduct the cost of your move.

Tax bill includes an incentive for US companies to invest in foreign manufacturing

Tax bill includes an incentive for US companies to invest in foreign manufacturing

Sometimes Ann Coulter is an idiot, for instance when dissing federal encouragement of having children

You'd think someone who wants America for Americans would want to encourage anything which promotes Americans having more children instead of importing them, but you would be wrong.

Rubio's insistence on a larger child tax credit stops some of the damage being done by Republicans to people with families larger than four.

Abolishing the personal exemption meant parents lost those exemptions for all their children, and the increased standard deduction didn't go far enough to replace them, meaning they'd pay more in taxes just because they have more kids.

Coulter's indignation appears to be purely personal, an ugly intrusion of the irrational into her otherwise often rational positions.

She doesn't realize how libertarian she sounds (she hates them by the way). Americans who have children are making it possible that something like America survives into the future, which is a more sure and lasting contribution than any law which might be passed.

Some of the founders recognized that laws are a mere parchment barrier. When the pirates are attacking, you need a navy, which means sailors, not a bill of rights.

1986 was the last year domestic investment exceeded investment abroad, which is why everything REALLY SUCKS here now

NAFTA began with Canada in 1989, was expanded in 1994, China became a WTO member in 2001, but the 1986 tax reform really started the final leg down

Judge Roy Moore loses US Senate bid in Alabama by 20,715 votes, 1.5 points

Judge Roy Moore joins the Todd Akin club.

Republicans got the man they really wanted, Democrat Jones, who will give them the convenient excuse they need for not passing the Trump agenda without having to vote against it.

I sincerely hope more Republicans get what they want in future. They deserve it for not delivering on The Wall, an immigration pause, and tax reform which benefits individuals instead of corporations.

Conservative heroine Phyllis Schlafly opposed the territorial tax system the Republicans are about to shove down our throats

Here in November 2011:

Although the Perry plan's most striking feature is its anti-marriage bias, his proposal for corporate income is equally pernicious. Perry would shift businesses to a "territorial" tax system, which means that corporations would be taxed only on the profits they earn inside the United States.

We should do exactly the opposite. We should reduce or eliminate taxes on businesses that employ Americans producing goods and services inside our own country, while increasing taxes on the profits that corporations earn by outsourcing or manufacturing overseas.

Above all, we should eliminate the foreign tax credit, a self-destructive provision that allows corporations to pay China, Venezuela or Saudi Arabia the money they would otherwise owe the U.S. government. Let's also cut out the deductions that U.S. corporations take for hiring foreigners to do work that Americans can do.

Those who support a territorial business tax argue that it will encourage multinational corporations to bring home the profits they earn overseas, but that's unlikely so long as it remains more profitable for them to invest in cheap-labor countries. Of Republican presidential candidates, only Herman Cain and Rick Santorum understand that what corporations need is lower taxes on their operations inside the United States rather than on the profits they earn in other countries.

Gene Sperling: Republican tax reform will shift even more corporate profits and jobs abroad

You'd better pray this reform effort fails, for your kids' sake.

In The Atlantic here:

Now that the bill is advancing, it’s clear that things aren’t as bad as many feared. They’re worse. . . .

[T]he tax plan fails when it comes to incentives to shift profits and operations overseas and to curtail the obsession of major multinational companies with international tax arbitrage that has nothing to do with innovation, productivity or job creation. Indeed, the ability to blend income from intangibles and routine profits, and from investment in higher tax nations with tax havens with zero taxes, leads to a worst of all worlds scenario: an even greater corporate focus on international tax minimization through a careful mixture of shifting profits and operations overseas.

If there was one thing the GOP international tax bill was advertised to accomplish, it was that it would favor locating jobs and profits in the United States. It does just the opposite—expanding the degree our tax system tilts the playing field against American taxpayers and American workers.

Sum Ting Wong: Low top marginal tax rates since 1986 have NOT delivered

Low top marginal tax rates have NOT delivered since 1986.

The average top marginal rate has been 38% for the last thirty years, 49% lower than the average rate of 75% which prevailed from 1956 until the Reagan tax reform of 1986.

After the reform, stocks have done little better than before, but gross public debt has increased at a rate 21% higher than before, growth of current dollar GDP has plunged by 66%, and growth of household net worth has slowed by 48%.

Where did the gains from the Reagan tax cuts go?

You know the answer. The number of US billionaires has exploded from just 41 in 1987 to 536 in 2015, up 1,207%. The money has gone into the pockets of the few, instead of into investment. From 1960 to 1986 net domestic investment grew 846% whereas in the 30 years since 1986 the metric has grown by only 117%, a contraction of 86% under the more favorable personal income tax regime.

The lesson seems clear.

Higher marginal income tax rates force the wealthy to invest in business and derive their income from investments taxed at the preferred lower long term capital rates. Lower marginal personal income tax rates, however, entice them away from going through all the trouble, in turn depriving the economy of growth, employees of growing incomes and wealth, and the government of revenue.

Like the formerly sound public policy which invented the 30-year mortgage to force people to save for the future in the housing piggy bank, the time has come to reincentivize business owners to invest more in their businesses by making the personal income option less attractive.

Neither Republican tax bill does this. 

  

Recent history shows that recipients of lower top marginal income tax rates haven't invested the money . . . here

The top marginal rate averaged 70% from 1960, 73% shown is from 1956. The investment data starts in 1960.

Individuals and businesses need incentives to invest here in the United States. They won't do it naturally.

Recent tax history shows this to be the case. For decades when top marginal income tax rates were very high before 1986, the most successful in our society plowed money into domestic investment to grow businesses through which they could derive income, which was taxed at lower long term rates than ordinary income which was taxed at very high rates. Not only did they themselves benefit handsomely, but the whole country benefited because people found useful employment and government received tax revenue. It was an arrangement which made America great.

After the 1986 tax reform which lowered top marginal rates, this stopped being true. The record shows a steep fall-off in domestic investment, which is one reason why incomes and jobs have been stagnant and deficits have piled up. 

The other reason, of course, is free-trade, euphemistically called globalization, which made it possible for businesses to invest internationally instead of domestically. This has been a boon to the growth of middle classes in other countries, but not in our own.

It's not very patriotic, is it?

What we need now is government policy which rewards domestic investment, and punishes its export. The best way to do this is to abolish taxation on domestic business completely to attract more of it, and heavily tax foreign business. We should also reinstate the correct mix of high top marginal income tax rates to incentivize business investment, coupled with attractive long term capital gains tax rates as a reward to the true risk-takers.

Needless to say, the Republican shift away from worldwide taxation to territorial taxation in the "reform" is about reducing risk to established business. This is simply going to make matters much worse for the American middle class, as is the obsession with making money the easy way through lower top marginal ordinary income tax rates.

The American character and spirit I once knew appears to be truly dead.

The new giant sucking sound of your jobs going abroad: Republican territorial tax "reform"

Phyliss Schlafly was rightly against a territorial system long ago, and most recently opposed it when the doofus from Texas, Rick Perry, proposed it as a candidate for president in 2015. Schlafly understood that it was anti-American, but she's dead, her voice gone silent. Only some lonely leftists remain who understand how wrong this is. No voices on the right are speaking out against this travesty.

Trump on the other hand thinks this is great, but obviously understands this as little as any other policy issue. He has become the Republicans' biggest chump, with the rest of us in tow.

From the story here:

Today, the United States has what’s known as a worldwide tax system in which all profits—foreign and domestic—are subject to a 35 percent corporate income tax. If a US company wants to return foreign profits to the United States, it pays the 35 percent rate minus what it’s paid to foreign governments. The House and Senate tax bills replace this with a “territorial” system that drops the tax rate to 20 percent for domestic profits and nothing for foreign profits.

The territorial model that the GOP is pushing would create an additional incentive to invest in countries like Ireland where the corporate rate is significantly lower than the United States. Republicans believe the differences won’t be big enough to drive investment abroad. Steve Rosenthal, a senior fellow at the Tax Policy Center, disagrees, saying that’s still “plenty of juice” to encourage companies to shift production to countries with lower tax rates. Kimberly Clausing, an expert in international taxation at Reed College, writes that the shift to a territorial system “makes explicit, and permanent, the preference for foreign income over domestic income.” She estimates that profit shifting already costs the US government more than $100 billion per year. 

Large multinational companies can already play games to avoid paying the full rate, such as transferring intellectual property to tax havens and then stashing those profits abroad to indefinitely put off paying US taxes. Apple, for example, transfers patents and other intangible assets abroad, and then further reduces its tax burden with additional sub-licensing. Through tax schemes with names like the “Double Irish With a Dutch Sandwich,” Apple has been able to amass more more than $128 billion in profits abroad that haven’t been touched by the IRS.

Republicans are proposing a series of guardrails to try to prevent companies shifting intangible assets—such as patents and trademarks—to tax havens. But Rosenthal says those protections are mostly ineffective and in fact create a set of new incentives to invest more abroad. He adds that it’s unclear whether the new status quo would be worse than the current system.

The main guardrail in the tax bills would impose a 10 percent tax on foreign profits that exceed a company’s “routine” return on tangible assets abroad. (Rosenthal’s blog post provides a more detailed explanation of how that works.) In theory, the guardrail would lead to companies paying a 10 percent tax when they shift profits to tax havens, but not when they actually make things abroad. In practice, the guardrail allows companies to shelter more money in tax havens when they build factories and other physical assets abroad—offering new tax incentives for companies to ship jobs overseas.

Either way, 10 percent is still half of what they would have paid if they hadn’t tried to game the system. Clausing argues that’s a clear sign Republicans are favoring foreign profits. Another is that Republicans’ aren’t using a territorial tax model that requires companies to pay a minimum rate in every country they operate in. Instead, the bill only considers whether they pay 10 percent abroad, on average. That’s an easy loophole to exploit. If Ford has a factory in Japan, it pays a corporate tax rate of about 30 percent. Ford could then shift intangible assets from the United States to a tax haven like Bermuda and still be paying more than 10 percent on a global basis. Clausing tells Mother Jones that it’s “well-known that a per-country minimum tax would be more effective and I think that’s why they didn’t do it.” 

NYT claims 2010 Obama Paygo law would require mandatory spending cuts under the Republican tax bill

From the story here:

The biggest program affected would be Medicare, the health insurance program for older people and the disabled. But the law allows Medicare to take only a relatively small cut: 4 percent. Other programs have no such protection. ... [Paygo] requires that legislation that adds to the federal deficit be paid for with spending cuts, increases in revenue or other offsets.

Once again Republicans refuse to even THINK of cutting spending in order to cut taxes

Reported here:

The Senate parliamentarian ruled Thursday that a fiscal "trigger," important to winning deficit-wary Sen. Bob Corker's support for the GOP plan, will not work under Senate rules. Republican senators are now looking to find new ways to address the concerns of Corker, a so-called deficit hawk Republican from Tennessee.

"It doesn't look like the trigger is going to work, according to the parliamentarian," Senate Majority Whip John Cornyn, R-Texas, told reporters, according to Politico. "So we have an alternative, frankly: a tax increase we don't want to do to try to address Sen. Corker's concerns."

Retiring Sen. Bob Corker demands Republicans raise taxes in order to cut them

We had to destroy the village in order to save it.

Bombing is the only way forward.

We had to have a war between the States in order to save them.

Export subsidies are necessary in order to preserve free trade.

I have abandoned free market principles in order to save the free market system.

The London Interbank Overnight Rate system had to be suppressed in order to save the banking system.

We had to bail out the banks so that we could sue them. 

How to know the Senate tax bill SUCKS: John McCain now supports it

From the story here:

"After careful thought and consideration, I have decided to support the Senate tax reform bill," McCain said in a statement. "I believe this legislation, though far from perfect, would enhance American competitiveness, boost the economy, and provide long overdue tax relief for middle class families."