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Message
Latest on BAT & Tax Cut (Reform)
Posted on 2/18/17 at 7:20 am
Posted on 2/18/17 at 7:20 am
This slipped through (and I didn't notice it) while the media was discussing press conferences and other important stuff that I don't care about, and doesn't impact my life:
LINK
LINK
It's difficult for me to understand what is actually happening becuase he apparently has backed away from BAT, but he seems to talk about it from time to time.
LINK /
Moving target. Very few facts. Brackets are largely consistent, but standard deduction, pass through etc seem to either not be set, or not be reported.
LINK
LINK
It's difficult for me to understand what is actually happening becuase he apparently has backed away from BAT, but he seems to talk about it from time to time.
LINK /
Moving target. Very few facts. Brackets are largely consistent, but standard deduction, pass through etc seem to either not be set, or not be reported.
This post was edited on 2/18/17 at 7:39 am
1
Posted on 2/18/17 at 7:25 am to Iowa Golfer
quote:
Under a Trump tax plan middle class tax payers would likely see modest tax savings, while those in highest income ranges would actually see the most in savings given the lowering of the highest marginal tax rate, increase in standard deduction and repeal of the AMT. Under proposed Clinton plans middle income earners saw more tax savings while higher income earners were taxed more heavily.
This kinda sums it up. From your 3rd link.
Posted on 2/18/17 at 7:36 am to Hugo Stiglitz
It doesn't sum it up. There are a lot of details missing. That's mostly the point of my post. Hillary's plan would have saved the median income earner about $110, and shaved about 1/4 a point of off GDP. Trump's plan adds to the deficit, but it depends on whether static projections are used as to the amount. There is quite a lot more to this than the three links I posted. I posted them becuase the first article say BAT is gone, and the other two articles don't mention standard deduction or pass through, and these are significant changes if the articles are to be believed.
Posted on 2/18/17 at 8:21 am to Hugo Stiglitz
Hugo....tough times ahead? 
This post was edited on 2/18/17 at 8:21 am
Posted on 2/18/17 at 8:54 am to Hugo Stiglitz
quote:So what do you think? Fair or unfair?
This kinda sums it up. From your 3rd link.
Posted on 2/18/17 at 9:00 am to Hugo Stiglitz
quote:
while those in highest income ranges would actually see the most in savings given the lowering of the highest marginal tax rate,
Makes sense considering the tax burden of the nation is so heavily carried by higher income earners.
Posted on 2/18/17 at 10:39 am to Iowa Golfer
quote:
I posted them becuase the first article say BAT is gone, and the other two articles don't mention standard deduction or pass through, and these are significant changes if the articles are to be believed.
I wouldn't go off that. Seems like they are trying to fill in the gaps on details between the two camps. Still a moving target as you say. Trump could turn around tomorrow and say he's for the BAT for example.
Eta: also, I am surprised we haven't heard more about interest rate deductibility going away potentially. That would be huge.
This post was edited on 2/18/17 at 10:48 am
Posted on 2/18/17 at 11:34 am to Lou Pai
A cap on mortgage interest at 100K? Or eliminating interest on cap ex., and expensing 100% within the first several years?
That's all I've seen. The first wouldn't be a big deal, would it? The second was very misunderstood from what I read.
That's all I've seen. The first wouldn't be a big deal, would it? The second was very misunderstood from what I read.
Posted on 2/18/17 at 12:56 pm to Iowa Golfer
Interest rates for corporations in the House plan. What we have always assumed about cost of capital turns on its head, and companies will begin to de-leverage from where they are now over time. I.E., the whole thing about debt being cheaper than equity.
Posted on 2/18/17 at 2:02 pm to Lou Pai
Remember I'm a simple guy. I read that editorial that equity financing would become less expensive than debt financing. Why I don't think so is that what was reported as proposed was eliminating interest deduction on capital expenditures, but allowing more aggressive depreciation over a shorter period. Actually I had thought the immediate deduction from capex in the year it was done. These reports were highly speculative, and also suggested carve outs for commercial real estate and banks for obvious reasons.
Also, if tax rates decrease overall, wouldn't the benefit of debt financing be reduced anyway?
Also, if tax rates decrease overall, wouldn't the benefit of debt financing be reduced anyway?
Posted on 2/18/17 at 2:14 pm to Iowa Golfer
quote:
Also, if tax rates decrease overall, wouldn't the benefit of debt financing be reduced anyway?
Good point. You will see companies de-leverage already, especially as interest rates gradually tick up. The industry lobbying etc. is going to be really interesting to watch.
And for the other part, isn't MACRS already allowed for tax purposes? What forms of tax depreciation are more aggressive than that? I don't know anything about it.
Eta: oh you're saying capex in year 1? Is that a Ryan or Trump aspect?
This post was edited on 2/18/17 at 2:20 pm
Posted on 2/18/17 at 3:29 pm to Lou Pai
I had thought all in the first year. Which will upset some people, including Mr. Buffett, and possibly some bankers. Again, all of this was speculation, and part of this was carving out certain industries. It's complicated, which is another reason I didn't take the bait in the last thread about taxes on a post card. It's not even realistic for a large part of people filing with just W2 income.
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