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How the Trump Administration Is Giving Even More Tax Breaks to the Wealthy

MarkMark
in Other Investing

NYT Shareable Article

"With little public scrutiny, the Trump administration is handing out hundreds of billions of dollars in tax cuts to some of the country’s most profitable companies and wealthiest investors.

The Treasury Department and Internal Revenue Service, through a series of new notices and proposed regulations, are giving breaks to giant private equity firms, crypto companies, foreign real estate investors, insurance providers and a variety of multinational corporations.

The primary target: The administration is rapidly gutting a 2022 law intended to ensure that a sliver of the country’s most profitable corporations pay at least some federal income tax. The provision, the corporate alternative minimum tax, was passed by Democrats and signed into law by President Joseph R. Biden Jr. It sought to stop corporations like Microsoft, Amazon and Johnson & Johnson from being able to report big profits to shareholders yet low tax liabilities to the federal government. It was projected to raise $222 billion over a decade.

But the succession of notices the Treasury and I.R.S. have issued beginning this summer means the tax could bring in a fraction of that."

Comments

  • Old_JoeOld_Joe
    edited 12:02PM
    No problem- they can use the money that they saved by cancelling SNAP to cover the handout to big business.

    Unbelievable.

    No, sadly, completely believable.
  • CrashCrash
    Soul-less, unfathomably greedy, immoral sacs full of wet, week-old cockroach farts. Repugnant subversive "Party." Is he dead yet? They simply do not deserve to share the breath of life with actual people.
  • WABACWABAC
    The rest of us are paying tariffs at a regressive rate. So it's revenue neutral. And those rich people are going to use all that money to hire people to do . . . something. AI can't wax the car . . . yet.
  • beebee
    edited 11:37AM
    OP article explains AMT taxes. Another tax avoidance tactic is explained in this additional NYT article (see below) focuses on how (Limited Partnerships) help individuals avoid taxes.

    Biden and Dr Oz chose this route recently:
    Before he became president, Joseph R. Biden Jr. avoided paying Medicare taxes by funneling earnings from his book and speeches through two S corporations, according to his tax returns. Dr. Mehmet Oz, who leads Medicare and Medicaid, avoided self-employment taxes on income he collected through an L.L.C. between 2021 and 2023, according to a memorandum prepared by Senate Democratic staff members who reviewed his tax returns.
    Bessent, who is at the IRS helm, is the main focus in my linked article.

    Both side are guilty if we are keeping score.

    IMHO, tax laws are written and rewritten by the rich... for the rich, regardless of their politics.

    NYT Article:
    scott-bessent-irs-loophole
  • yogibearbullyogibearbull
    The basic problem is that companies are allowed to keep 2 sets of books.

    The one set for earnings reports and and investors uses different (conservative) depreciation and amortization rules to optimize (maximize) reported earnings.

    The other set for IRS and tax calculations can use aggressive depreciation and amortizations to optimize (minimize) taxes.

    Of course, the calculated (least possible) taxes are reported in the first set. And that leads to complaints that profitable companies get away by paying low or 0 taxes.

    I think that the solution isn't to further complicate the issues by introducing some sort of corporate AMT (individual AMT form is a pain even though the answer for me every year is that I own 0 AMT), but instead, this dual reporting system should be eliminated.
  • Sven
    The basic problem is that companies are allowed to keep 2 sets of books.
    Isn’t that how the mobsters ran their business?
  • yogibearbullyogibearbull
    Sven said:

    The basic problem is that companies are allowed to keep 2 sets of books.
    Isn’t that how the mobsters ran their business?
    Well, mobsters are playing with revenues, not just depreciation, amortization and tax calculations.
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