guaranteed, neither you nor your representatives in congress will ever understand the U.S. tax code and any lie 'they' tell will go undetected for eons...the voluminous and ever-changing U.S. tax law is too complicated... making it easy for corporate cheating - since the creation of the modern income tax, what began in 1913 as a 400-page legal information service stands today as a 73,608 page, 25-volume service called CCH Standard Federal Tax Reporter
There is the lie. Use words that everyday people easily understand, but put those common words into complex concepts where the words have lost meaning. 'Small business' sounds like talking about 'small businesses' which conjures up mental images of a 'mom & pop' business operation. But, as used when talking about the United States tax laws, 'small businesses' actually means something completely different than what the everyday people would have believed.
In the United States tax code, about to be 'fixed' by congress, 'small businesses' will be rewarded with a 'new' 25 percent top tax rate. The lie is that almost all legitimate 'small businesses' already pay a top tax of 25 percent.
The unspoken (in public) part of this particular lie is that the real words to describe the real situation in the complicated tax laws are "pass through income". As applied in this situation, the "new" laws would effect not just 'mom & pop' businesses but would effect giant hedge funds and private equity partners along with their lawyers. These wealthy operations would see their 'top' tax burden drop from nearly 40 percent to only 25 percent. Not that they ever actually pay the 'top' tax rate. There are enough existing loop-holes and tax dodges that allow many of largest businesses in the country to pay no taxes at all.
Add to all of this a language of words and phrases that are intentionally selected and designed to mis-lead, permitting the 'people' to be legally robbed and cheated - it is legal because the 'law' says so.
There are a number of reasons why a profitable company may not pay taxes. For instance, years of deep losses can affect a tax bill.
Take United Continental, which reported a $3.2 billion income tax credit in 2015 despite reporting earnings before taxes of $4.2 billion. Accounting rules allow the airline to offset taxes due with valuation allowances resulting from losses in past years. During 2015, these allowances amounted to $4.7 billion which erased the company's $1.5 billion tax bill based on its normal corporate tax rate. |  |
The code words in this instance are "accounting rules allow" and "offset taxes due". The mom & pop business doesn't get the benefit of these complicated tax law exceptions.
Although the top corporate rate is 35 percent, hardly any company actually pays that. The report, by the Institute on Taxation and Economic Policy, a left-leaning research group in Washington, found that 100 of them — nearly 40 percent — paid no taxes in at least one year between 2008 and 2015. Eighteen, including General Electric, International Paper, Priceline.com and PG&E, incurred a total federal income tax bill of less than zero over the entire eight-year period — meaning they received rebates. The institute used the companies’ own regulatory filings to compute their tax rates.
"86 percent of households with pass-through income already pay 25 percent or less, so will see nothing from this Republican tax plan."
from Common Dreams by Hunter Blair
The Republican tax plan claims to be helping small businesses with a new loophole that’s actually tailor-made for the rich. The loophole is a new 25 percent top tax rate for pass-through businesses. Pass-through businesses are those that retain no earnings and pay no taxes at the business level. Instead, all profits are “passed-through” to the business owners, who then pay their individual income taxes, just like you and me.
This means that while almost all genuine small businesses are pass-throughs, not all pass-throughs are genuine small businesses. For example, pass-through income has exploded in recent decades, and most of this increase is not attributable to mom-and-pop stores, but to hedge funds and law firms and private equity partners. In fact, 49 percent of all pass-through income goes to just the top 1 percent of households. This makes pass-through income one of the most concentrated-at-the-top income categories in the entire economy.
This also means that the only straightforward tax cut provided by the loophole proposed in recent Republican tax plans is for rich households, not most small businesses. For example, take a married couple whose small restaurant made them $150,000 in net profits. They will not be helped by this proposal because they’re already paying a 25 percent marginal income tax rate. 86 percent of households with pass-through income already pay 25 percent or less, so will see nothing from this Republican tax plan. The people this pass-through loophole helps wealthy people like President Trump, whose top tax rate on income from more than 500 pass-through businesses would fall from 39.6 to 25 percent.
Hunter Blair is a budget analyst for the Economic Policy Institute, in which capacity he researches tax, budget, and infrastructure policy.
from Common Dreams by Hunter Blair
The Republican tax plan claims to be helping small businesses with a new loophole that’s actually tailor-made for the rich. The loophole is a new 25 percent top tax rate for pass-through businesses. Pass-through businesses are those that retain no earnings and pay no taxes at the business level. Instead, all profits are “passed-through” to the business owners, who then pay their individual income taxes, just like you and me.
This means that while almost all genuine small businesses are pass-throughs, not all pass-throughs are genuine small businesses. For example, pass-through income has exploded in recent decades, and most of this increase is not attributable to mom-and-pop stores, but to hedge funds and law firms and private equity partners. In fact, 49 percent of all pass-through income goes to just the top 1 percent of households. This makes pass-through income one of the most concentrated-at-the-top income categories in the entire economy.
This also means that the only straightforward tax cut provided by the loophole proposed in recent Republican tax plans is for rich households, not most small businesses. For example, take a married couple whose small restaurant made them $150,000 in net profits. They will not be helped by this proposal because they’re already paying a 25 percent marginal income tax rate. 86 percent of households with pass-through income already pay 25 percent or less, so will see nothing from this Republican tax plan. The people this pass-through loophole helps wealthy people like President Trump, whose top tax rate on income from more than 500 pass-through businesses would fall from 39.6 to 25 percent.
Hunter Blair is a budget analyst for the Economic Policy Institute, in which capacity he researches tax, budget, and infrastructure policy.
As is clear from this chart, both corporate profits (the red line) and investment (the blue line) have soared in recent decades. There’s simply been no shortage of investment or investment funds, either from retained earnings or in terms of money borrowed from financial institutions. At the same time, the wage share of national income (the green line in the chart) has fallen precipitously.
So, even if cutting corporate tax rates (and thus permitting higher retained earnings) did lead to more investment, there’s no guarantee workers’ wages would increase as a result. They haven’t for decades now. Why should that change in the future?
Moreover, there’s no guarantee higher retained earnings would lead to more investment. Just as likely (perhaps even more so), corporations would be able to use their profits for other purposes—including higher CEO salaries, increased dividends to stockholders, and more mergers and acquisitions—which have nothing to do with raising workers’ wages.
The only result would be more corporate power and more obscene levels of inequality in the United States. And that’s no lie.
So, even if cutting corporate tax rates (and thus permitting higher retained earnings) did lead to more investment, there’s no guarantee workers’ wages would increase as a result. They haven’t for decades now. Why should that change in the future?
Moreover, there’s no guarantee higher retained earnings would lead to more investment. Just as likely (perhaps even more so), corporations would be able to use their profits for other purposes—including higher CEO salaries, increased dividends to stockholders, and more mergers and acquisitions—which have nothing to do with raising workers’ wages.
The only result would be more corporate power and more obscene levels of inequality in the United States. And that’s no lie.
"They" depend upon the ignorance of the general population and "they' compound that with all manner of deceptions. When the president and the congress tell the American people that the new tax laws are intended to benefit the 'middle-class', that's a whopping lie - and that's the truth !!!
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