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

Mark

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."

Old_Joe

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.

Crash

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.

WABAC

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.

bee

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

yogibearbull

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?

yogibearbull

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.

Crash

Yes, of whatever Party, the uber-wealthy look out for their vested interests. But even someone like myself who is as far from wealthy as can be, owns UNITS (not shares) in a MLP. The dividends are not taxable. Why? They are treated as Return of Capital.---until my cost basis becomes zero. THAT'S never going to happen. So, even before I knew I was playing the game, I've been playing the game.

It kills me that for those in the middle tax brackets, they pay more in federal tax that the ultra-wealthy who are taxed at a lower rate on their dividends, as they relax, sipping cocktails. Shit.

BenWP

What I found depressing about the Times article is the fact that the previous administration, using conventional means, instituted a requirement for the wealthy that the current administration, using crooked means, can ignore be telling the IRS not to enforce it. This is crony capitalism at the highest levels of government. Not the I'm the first to point out that the rule of law means nothing for a regime that places the wealth of the few to subvert the will of the rest of us. I shudder to think of what it will take to root out the rot now firmly in place in many organs of government and what it will take to reverse Trump policies just to get back to the status quo ante. I fear that much of the valuable institutional memory has already been side-lined by dismissals, layoffs, and forced retirements. It will be hard to get the victims of those reduction-in-force policies to come back to work once this president is gone.

Crash

BenWP said:

What I found depressing about the Times article is the fact that the previous administration, using conventional means, instituted a requirement for the wealthy that the current administration, using crooked means, can ignore be telling the IRS not to enforce it. This is crony capitalism at the highest levels of government. Not the I'm the first to point out that the rule of law means nothing for a regime that places the wealth of the few to subvert the will of the rest of us. I shudder to think of what it will take to root out the rot now firmly in place in many organs of government and what it will take to reverse Trump policies just to get back to the status quo ante. I fear that much of the valuable institutional memory has already been side-lined by dismissals, layoffs, and forced retirements. It will be hard to get the victims of those reduction-in-force policies to come back to work once this president is gone.

Every word of that is ringing in my ears....
...As I have asserted here before a few times already: I would bet it will take some big number of Orange-style and MAGA deaths before the US gov't is back to a place where there is any semblance of just the mere prospect of normalcy. 30 years? 40 years? Not to mention that there is an entire brainwashed Repugnant elected crew on The Hill which is hell-bent on perpetuating The Lie.

Even re: BOTH of the Parties which have locked-up Washington between them, how many in the House and Senate are 200+ years old? Too damn many. And how many are way-too-comfortably-wealthy? WAY TOO MANY. So, all of THAT needs to be changed, too.

But the American electorate is too stoopid. In the case of the Repugnants, they are both too stoopid AND ethically spineless.