Trump's tax plans

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They f**ed up..

A massive corporate tax cut is the Republican tax overhaul’s entire reason for being. It is the star around which the rest of the plan orbits. But Senate Republicans, in a frantic rewrite of their tax bill late last Friday, appear to have screwed it up. Kind of. At least for now. The price tag for the apparent mistake, added hastily in a late-night, partially handwritten draft, is $250 billion or more, according to some rough outside estimates. Businesses are furious. Correcting the Senate’s error is expected to be priority No. 1 as House and Senate members start negotiating a final tax package this week.

But this episode is a potent reminder of how haphazardly this once-in-a-generation tax rewrite was put together before the Senate passed it, and the enormous consequences of such a freewheeling approach.
If Republicans struggle or, worse, fail to correct their error, they risk undermining the entire internal logic of their bill: that this dramatic, permanent corporate tax cut will kick-start the economy, lifting up all Americans as the benefits trickle down.

The Senate tax bill’s $250 billion problem - Vox

The AMT explained

The corporate alternative minimum tax, explained This is a separate tax calculation under current law, used to make sure that businesses are forced to pay at least a base level of federal taxes and can’t totally avoid taxes by taking various deductions and credits. Few businesses pay it currently, because their regular rate is usually higher than the AMT rate, which works out to about 20 percent. The Senate bill, like the House bill, originally repealed it entirely while slashing the regular corporate tax rate from 35 percent to 20 percent. But Senate Republicans, as they tinkered with their tax plan just hours before they put it up for a vote, stuck the corporate AMT back in at the last minute to make sure the bill didn’t raise the federal deficit too much. At first it looked like a comparatively minimal provision, about $40 billion in revenue over 10 years, according to the Joint Committee on Taxation’s quick-hit analysis, in the context of a $1 trillion corporate tax cut. But over the past few days, policy experts, lobbyists, and the business community have come to believe the stakes are much bigger. Senate Republicans may have accidentally created this new tax system where many or even most businesses would end up paying the AMT — and would lose many prized tax breaks.

The problem is that the current AMT rate is about the same as the new corporate rate that Republicans want to institute. Under the Senate bill, businesses were supposed to be able to have the new 20 percent rate, but then also take advantage of tax credits and deductions to drive their tax burden even lower.

But if the AMT remains instead of being repealed, then businesses largely wouldn’t get their effective tax rate any lower than that. The AMT rate is usually substantially lower than the regular rate. But under the Senate bill, the AMT and the new corporate rate would be about the same: 20 percent. Companies would no longer be able to take advantage of tax breaks for research and development and the like. The whole point of the AMT is to eliminate deductions. “Basically everyone would pay it,” one lobbyist tracking the tax bill told me, adding for emphasis that fixing it would be the No. 1 and No. 2 priority for Republicans now.

The Senate tax bill’s $250 billion problem - Vox