aka 'How dumb is the left?'
...the new law requires charges in the near-term as foreign earnings face taxation and the value of deferred tax assets declines. Citigroup Inc. said it expects a hit of as much as $20 billion, while Bank of America Corp. will take a $3 billion charge and Credit Suisse Group AG is at risk of posting a third consecutive annual loss.
The old tax regime allowed companies to defer U.S. taxes until they brought back earnings held abroad. Under the new law, U.S. companies’ overseas income held as cash would be subject to a 15.5 percent rate, while non-cash holdings would face an 8 percent rate. Companies can make the payments in eight annual installments.
Goldman Sachs takes a one-time $5 billion hit from the U.S. tax bill https://t.co/Ua2QNWlqHV pic.twitter.com/BcFe8JXffw— Bloomberg Markets (@markets) December 29, 2017
Previous reports estimate that these earnings saved offshore at $2.5T, so a 15.5% tax on that would be about $400B. A straight-line realization of that over the 8 years would result in about a $50B annual rate of new taxes into the Treasury account.
If the firms choose to accelerate that then it may result in a short term windfall of deposits for the Treasury account.
8 comments:
I pay a higher tax rate just for FICA. And a higher tax rate on my income.
All in all this amount to a massive tax reduction for the rich. Statutory Corporate tax rates have been lowered to what is actually the effective tax rate and pass-through gets a big bonus.
The real question is just how many vacation estates can one person possible own?
Still doesnt address the fact that the left is portraying this as a big tax cut for these people meanwhile it is an increase and ON PREVIOUS EARNINGS no less and a REMOVAL of a big offshore tax dodge going forward...
Left is too stupid...
btw if they accelerate this then deficit is going to go way down... maybe to near balance....
Meanwhile left is saying it is going to go way up....
What if then???????
Bait and switch. I'll tax your offshore earnings at a fraction of statutory rate while cutting the statutory rate AND giving you all sorts of other breaks that offset your "losses". The tax "increase" is an illusion, designed to make poor people feel like the rich are actually paying something.
Do the math. It's really not that hard. I'll pay you 10% now for a 20% discount in perpetuity.
Got any deficit reduction stats to back up your nonsense (other than twitter feeds)?
"The federal government finished fiscal 2017 with a budget deficit of $666 billion, an increase of $80 billion over the previous year. It was the biggest shortfall since 2013 and the sixth-highest on record."
https://www.marketwatch.com/story/us-ends-fiscal-2017-with-666-billion-budget-deficit-2017-10-20
Reaganomics is the illusion that tax cuts spur growth when in reality it was massive deficit spending. Reagan tripled the deficit in his two terms and all that spending generated increased tax revenue.
“I'll pay you 10% now for a 20% discount in perpetuity.”
The taxes are not realized under the old law as the firms never make the earnings directly available to shareholders and remain in savings...
“Got any deficit reduction stats”
The law doesn’t go into effect until NEXT year...
The taxes are not realized under the old law as the firms never make the earnings directly available to shareholders
Whereas now the earnings will be taken as income at a ridiculously low tax rate (likely zero or less after various deductions are applied - NOBODY pays the full rate) then distributed as profit at reduced pass-through and top tax rates. If this wasn't a windfall for the rich they never would have allowed their congressmen to pass it.
Its a good deal... the firms give up a permanent deferment for a rate reduction...
To us its a pure win as the part of the fiscal deficit attributable to foreign corporate savings will go away and these morons will then think they have more fiscal space...
We have no downside at all in this....
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