Trump's tax plans

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The Trump administration’s $1.5 trillion in tax cuts appears to have not made any major impact on businesses’ capital investment or hiring plans, according to a new survey. A quarterly poll from the National Association for Business Economics published Monday found that some companies reported accelerating investments because of lower corporate taxes, but a whopping 84% of respondents said they had not changed their plans. That’s up slightly from 81% in the previous survey published in October, Reuters reports.

FTNW 1.9100 -0.0300 -1.55% : FTE Networks, Inc. - Yahoo Finance

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Donald Trump’s tax cut for the rich and the corporations they control is turning out to be a bust for the American economy. It will, however, burden taxpayers with at least $1.5 trillion more federal debt because, instead of boosting tax revenues through increased economic activity as promised, it has caused a sharp drop in revenue. In addition, millions of residents of blue states are about to get hit with big federal income tax increases while many American expatriates who own businesses overseas are also facing unexpected new tax bills, especially if they prudently saved for their old age under the systems of the countries where they now reside.

The laugh’s on us: How the Trump-radical Republican tax cut broke the economy – Alternet.org

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And the big story here is that as a result of the new tax law, the Treasury Department tweaked things so that on average taxpayers’ withholdings fell by more than their actual taxes owed. This was all explained in a Government Accountability Office report last summer, but it turns out that many people are not regular readers of GAO reports and did not take the GAO’s official advice to check their withholding status. The result? Surprise tax bills!

Trump tax bill and refunds: why fewer people are getting them - Vox

What happened?

• The Trump tax law was tweaked to make it look better for wage earners, but people didn't realize this.
  
• Now many people who filed for tax refunds are finding out that they actually have to pay additional taxes, rather than receive refunds.
  
• They are mad as hell, many voted for Trump but they're not going to do so again (the article has a collection of Twitter's that argue these things in no uncertain terms..).
  

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While some people have received some surprise tax bills when filing their returns, corporations continue to avoid paying tax — thanks to a cocktail of tax credits, loopholes, and exemptions. According to a report from the Institute on Taxation and Economic Policy (ITEP), Amazon (AMZN) will pay nothing in federal income taxes for the second year in a row. Thanks to the new Tax Cuts and Jobs Act (TCJA), Amazon’s federal tax responsibility is 21% (down from 35% in previous years). But with the help of tax breaks, according to corporate filings, Amazon won’t be paying a dime to Uncle Sam despite posting more than $11.2 billion in profits in 2018. How is that possible?

Amazon will pay $0 in taxes on $11,200,000,000 in profit for 2018

And states are fighting with one another to give it other big breaks if it builds a second headquarter in their area..

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Senate Republicans on Monday announced that they are reintroducing legislation to repeal the federal estate tax. The bill comes after the GOP tax law reduced the number of estates that would be subject to the tax but did not completely eliminate it. The legislation was offered by Sen. John Thune (R-S.D.), the number two Senate Republican, and is co-sponsored by more than two dozen others in the caucus, including Senate Majority Leader Mitch McConnell (R-Ky.) and Senate Finance Committee Chairman Chuck Grassley (R-Iowa). Thune has repeatedly introduced legislation to repeal the estate tax.

Senate Republicans reintroduce bill to repeal the estate tax | TheHill

This is only for the uber wealthy, perpetuating fortunes of the billionaire donar class.

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A new Congressional Research Service report shows the 2017 Republican tax law had a very muted impact on overall economic growth. Rather, the main consequence was that real tax rates for corporations fell by nearly half while individual income taxes barely budged. The law, which was the GOP’s proudest legislative accomplishment during the party’s two years of total control of Washington, has somehow been all but forgotten.

Ignored by its squeamish supporters unsure how to sell a gigantic corporate tax cut to normal people and mostly left to rot by Democrats who see more value in hitting the GOP over health care or other issues, it’s remarkably anonymous major legislation from a self-promoter like Donald Trump. But maybe that shouldn’t surprise us. If there was any remaining doubt that the Republican tax law was a lopsided giveaway to the corporate sector while offering negligible benefits for American workers, these findings should quell it. Here is the key sentence from CRS:

From 2017 to 2018, the estimated average corporate tax rate fell from 23.4% to 12.1% and individual income taxes as a percentage of personal income fell slightly from 9.6% to 9.2%.

Otherwise, GDP growth was level with pre-tax cut projections. Wage growth was marginal and slower than GDP. And while companies did use their windfall from the tax cut, as Vox’s Emily Stewart has been covering, “relatively little was directed to paying worker bonuses,” according to CRS.
It’s difficult to overstate just how weak the tax law’s influence was. Investments in US businesses did not seem to respond at all to the law’s provisions.

“Although investment grew significantly, the growth patterns for different types of assets do not appear to be consistent with the direction and size of the supply-side incentive effects one would expect from the tax changes,” the CRS researchers said. “This potential outcome may raise questions about how much longer-run growth will result from the tax revision.”

Trump Tax Cuts and Jobs Act: report shows it’s giveaway to corporations - Vox

That is, a big nothingburger:

• Virtually no effect on individual income tax
  
• Large effect on corporate tax but little if any effect on business investment, which is the crucial variable for raising economic growth.
  

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Not self-financing but adding significantly to the debt:

If they had paid attention to several estimates published around the bill’s passage, the fact that the bill, which largely focused on tax cuts for corporations and the wealthy, actually lowered federal revenue would not have been a surprise. The Joint Committee on Taxation estimated in December 2017 that the bill would add $1.5 trillion to the deficit over 10 years. Trump’s own Treasury Department acknowledged a $1 trillion budget hit even with wildly optimistic assumptions of economic growth. The Congressional Budget Office estimated in May 2018 that the law would add $1.9 trillion over the same period when taking into account $600 billion in debt service costs and a projected $550 billion increase in tax revenue..

Top Republican admits the GOP tax bill was mostly a lie – ThinkProgress

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AT&T, General Motors and Wells Fargo vowed to use tax cuts to create jobs. In fact, they did the opposite
The bill was voted into law in December 2017, reducing the corporate tax rate from 35% to 21%. AT&T’s benefit was a tax windfall of $21bn and an additional estimated $3bn annually. But instead of creating jobs and increasing investment into the company, AT&T has eliminated 23,328 jobssince the tax cut bill was passed, according to a recent report by the Communications Workers of America. The CWA also said AT&T reduced their capital investments by $1.4bn.

He noted only 4% of the US workforce saw any sort of pay increase or bonus from the tax cuts. Meanwhile, data collected by ATF shows corporations have cut thousands of jobs since the tax cuts were passed, while using tax windfalls to buy back $1tn of their own stock, which primarily benefits corporate executives and wealthy investors since half of all Americans own no stock.

General Motors’ CEO, Mary Barra, was one of Trump’s economic advisers on tax reform, and the company vocally supported working with the Trump administration on tax reform “that is beneficial to the US economy, beneficial to US manufacturing and creates jobs”. In November 2018, GM announced it would cease operations at five plants in Michigan, Ohio, Maryland and Ontario, Canada, resulting in the loss of more than 14,000 jobs in those communities. As GM is closing plants, the company has spent $10bn since 2015 on stock buybacks, and made a net profit of over $8bn despite paying no federal taxes in 2018. GM reported a tax windfall of $157m in the first three months of 2018 due to the Trump tax cut.

Wells Fargo, the fourth largest bank in the US by assets, tied a minimum wage increase of $15 an hour to the Trump tax cuts and pledged increased investments in workers. The company is estimated to save $3.7bn annually due to the Trump tax cut. The bank’s 2018 tax savings were 47 times more than the costs of its minimum wage increases. Rather than invest in its workforce, Wells Fargo bought back 350m shares in early 2018, worth about $22.6bn, increased CEO salary by 36%, and announced plans in September 2018 to eliminate at least 26,000 jobs in the US over the next three years as many of those positions are being sent overseas.

Bosses pocket Trump tax windfall as workers see job promises vanish | Business | The Guardian

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Fox News host Tucker Carlson said late Wednesday the 2017 GOP tax cut supported by the Koch brothers "was far better for corporate America than it was for the middle class." "For years, the brothers have been the single most important funders of Republican politics in Washington, in the country" Carlson said during his opening monologue of his primetime program, adding that Charles and David Koch have been "remarkably effective in American politics." "But in the case of the Kochs, conservatives might want to pause and rethink the relationship," he later added. "As it turns out, the Kochs don’t have much in common with conservatives.

They are totally opposed to most conservative policy goals. The Kochs are libertarian ideologues, passionate and inflexible." After stating that the Kochs were at odds with the American people in pushing for cuts to Social Security and Medicare while opposing a bipartisan bill to lower drug prices, Carlson broached the tax cut signed into law by President Trump in December 2017. "Then the Kochs helped craft the 2017 tax cut, which was far better for corporate America than it was for the middle class," he said. "A majority of Republicans support capping interest rates on credit cards and payday loans. The Kochs think that’s ridiculous. Some years ago, when David Koch ran for vice president as a libertarian, abolishing all usury laws was part of his platform."

Tucker Carlson: GOP tax law 'far better deal for corporate America' than middle class | TheHill

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The Trump administration is considering a rule change that would make it easier for American companies to stash money offshore to avoid U.S. taxes, despite the president’s repeated campaign promises to bring offshore cash back home. The Treasury Department is looking to weaken or eliminate Obama-era regulations aimed at preventing companies from moving their income to their overseas branches to lower their U.S. tax bill, Bloomberg reports. Treasury Secretary Steven Mnuchin, a former Goldman Sachs executive, instead wants to replace the existing rules with “something more business friendly.” The move would be a boon to large corporations, who already saw their taxes permanently slashed by the Republicans’ 2017 tax cuts, which overwhelmingly benefited companies at the expense of individual taxpayers.

‘Another betrayal’: Trump promised to bring offshore profits home — but he’s doing the opposite – Alternet.org

• Are you even surprised anymore?