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Started By
Message
re: Gov. John Bel Edwards wants big changes in how LA biz, individuals taxed
Posted on 3/17/17 at 3:45 pm to tke857
Posted on 3/17/17 at 3:45 pm to tke857
This is fairly complicated topic and that article just gives a brief summary.
Yes this is a version of the Texas margin tax; though I have heard it will be more like a version of Ohio's Corporate Activity Tax.
It has pluses and minuses and a lot depends on the details. It COULD result in a much better tax structure or it COULD make things much worse. It COULD result in higher taxes on business.
Best guess at this point is that it will fix some things (but eliminating a lot of credits and deductions and have a low universal rate) but screw some other stuff up (keeping some of the costlier credits like film, historic and inventory) and putting a series of complicated rules dealing with pass-through to individual.
Right now I have heard that the business would pay the margin/gross receipt tax and partners and individuals could take a deduction (not credit) on their individual income tax.
That could double tax some people. Again have to wait and see the details.
Yes this is a version of the Texas margin tax; though I have heard it will be more like a version of Ohio's Corporate Activity Tax.
It has pluses and minuses and a lot depends on the details. It COULD result in a much better tax structure or it COULD make things much worse. It COULD result in higher taxes on business.
Best guess at this point is that it will fix some things (but eliminating a lot of credits and deductions and have a low universal rate) but screw some other stuff up (keeping some of the costlier credits like film, historic and inventory) and putting a series of complicated rules dealing with pass-through to individual.
Right now I have heard that the business would pay the margin/gross receipt tax and partners and individuals could take a deduction (not credit) on their individual income tax.
That could double tax some people. Again have to wait and see the details.
2
Posted on 3/17/17 at 4:10 pm to BigJim
Question
GC wins a contract to build a building for a million dollars.
If there is s CAT of 1% does he pay a 10K in taxes?
If he buys his concrete from Ascendion Ready Mix and pays them 10K for the concrete Ascension Ready Mix pays 100 dollars right?
If he hires a electrician for 100K the elec cont. pays 1K right?
If the EC buys his gear from Reulet for 15K then Reulet pays their 1%.
And the beat goes on?
Every entity that is paid on this project pays taxes down the line, right? Not just the GC.
Now in the end where is the money to pay the taxes going to come from? Yes the owner who will bear the tax increase.
Now look at the little guy. When Piggly Wiggly sells you a six pack of beer they will charge you sales tax and the CAT, right? They have to do that or take it out of their profits which won't happen. Again the business won't pay the tax the person that receives the goods or services will pay and that is you.
GC wins a contract to build a building for a million dollars.
If there is s CAT of 1% does he pay a 10K in taxes?
If he buys his concrete from Ascendion Ready Mix and pays them 10K for the concrete Ascension Ready Mix pays 100 dollars right?
If he hires a electrician for 100K the elec cont. pays 1K right?
If the EC buys his gear from Reulet for 15K then Reulet pays their 1%.
And the beat goes on?
Every entity that is paid on this project pays taxes down the line, right? Not just the GC.
Now in the end where is the money to pay the taxes going to come from? Yes the owner who will bear the tax increase.
Now look at the little guy. When Piggly Wiggly sells you a six pack of beer they will charge you sales tax and the CAT, right? They have to do that or take it out of their profits which won't happen. Again the business won't pay the tax the person that receives the goods or services will pay and that is you.
Posted on 3/17/17 at 4:23 pm to BigJim
quote:
putting a series of complicated rules dealing with pass-through to individual.
This could be done with a simple LA Schedule E deduction. Might need to add a one page schedule where the individual taxpayer identifies the businesses and the LA revenue ID numbers.
quote:
Right now I have heard that the business would pay the margin/gross receipt tax and partners and individuals could take a deduction (not credit) on their individual income tax.
That could double tax some people. Again have to wait and see the details.
Yeah that ain't gonna fly... that would put small businesses / passthroughs as paying significantly more in tax than large corporations.
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