FYI: axes: some quick bullets.
Markets like lower taxes. People like lower taxes. Businesses like lower taxes. Devils always lurk in the details: those devils are put there by Congress.
Congress will lose if it attempts to block a tax cut. Voters understand lower tax rates and want them. Voters do not focus on longer-term deficit projections. Voters do not care about CBO scoring or a change from static scoring to dynamic scoring. Most voters care more about the ballgame score or the book club than about CBO’s long-term projections.
Conclusion: some form of a tax cut is coming.Repatriation is NOT a zero-sum game.
Regards,
Ted
http://ritholtz.com/2017/05/about-taxes/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+TheBigPicture+(The+Big+Picture)
Comments
Their Book on Amazon:
America: What Went Wrong?
Here's their series from the Philadelphia Inquirer:
philly.com/philly/opinion/inq_HT_WhatWentWrong1991.html
https://www.vox.com/policy-and-politics/2017/5/2/15500544/trump-tax-plan-lying
and look at that support
http://www.cnn.com/2017/04/26/politics/white-house-donald-trump-tax-proposal/
With so little in it, people are grasping at anything said by anyone in government. Some of those people change what they're saying twice a day. While guesstimating what is even being proposed make make for amusement as an intellectual exercise (did I really say "intellectual" here), all one really gets out of the exercise is a vague sense of a large giveaway.
For example, the "plan" protects home ownership deductions but eliminates targeted tax breaks that mainly benefit the wealthiest taxpayers. To some people the idea of getting $1M for a $500K home makes the home sellers wealthy.
There's even a tax break for that. (Couples can exclude $500K of that gain from income.) It isn't even a home ownership deduction, but a home disownership deduction - it benefits you when you decide to end your home ownership. So does this deduction stay or go?
My guess is that it stays in, but then what about the property tax deduction? Isn't that a home ownership deduction too? Especially since it's one you get by owning a home, not by getting rid of a home. Seems a little strange, though, to allow people to deduct some state taxes (home property taxes), but not others (property taxes on your car, state income taxes).
I'll wait for the draft legislation released some time under dead of night before speculating too much.
As noted in this ABA Probate and Property article (2005) "much of the justification for the step-up in basis is tied to the imposition of an estate tax", so when the estate tax was eliminated in 2010, "a modified carryover basis system" was added.
I even found a recent article stating that Trump himself said that the step-up would be eliminated.
"Trump, on the other hand, has said that he will repeal the estate tax entirely, eliminate the step-up in basis on inherited assets, and institute the administrative nightmare of a carry-over basis (a carry-over basis was instituted in 1976 and repealed less than two years later because it proved unworkable), all of which would effectively replace the federal estate tax with a capital gains tax on estates exceeding $10 million."
http://www.thelegalintelligencer.com/id=1202778962620/Repeal-of-Estate-Tax-Practical-Questions-in-Uncertain-Times?slreturn=20170403005325
Of course Trump may have said the opposite two hours later (or earlier), which is part of the problem in doing even a high-level analysis of any of this.