Some large businesses are claiming that, rather than being good for job growth, the tax reform plan currently on offer in outline form would be good for investors.
As if these are mutually exclusive outcomes.
The chief executive of Honeywell International, Darius Adamczyk, said tax reform will “offer greater flexibility for Honeywell,” adding that the industrial conglomerate would invest more cash in the United States to pay for dividends, mergers and acquisitions, share buybacks and paying down debt.
Amgen CEO Robert Bradway said on Wednesday any tax reform would be incorporated into its capital allocation plans, noting the drugmaker expects to continue to raise its dividend and buy back shares.
Republicans disagree among each other about the deductibility on Federal personal tax returns of property and sales taxes levied by States, with most of the objections coming from Republicans whose constituents are in high-tax States (which is to say, primarily Progressive-Democrat-led States like New York and California). I’ve written elsewhere about the nature of that beef.
In my infinite wisdom, I offer a couple of alternatives for compromise.
One is to allow Federal income taxpayers to deduct either their State’s property tax or its sales tax, but not both. Another is to allow the deductibility of both, but only part of the taxes—say 50%—not all of them.
Recall that under Obamacare, health coverage plan providers are required to subsidize low-income Americans (who, under Obamacare, are required to buy the plans regardless of need for the plans on offer or ability to pay the vig for them) for their costs in buying those health coverage plans. Recall further that the Obama administration paid those plan providers monies to reimburse them for those government-mandated subsidy payouts. Recall also that Congress never appropriated any funds for the purpose of making those payments to the plan providers. Finally, recall that a DC District court ruled those payments to the health plan providers illegal—because Congress had not appropriated any funds for the purpose. Then the Trump administration ceased those payments to the health plan providers.
The current Republican Federal tax reform plan on offer, at least as described by the NLMSM, includes elimination of the deductibility of State taxes on our Federal tax returns. Naturally, Progressive-Democrats object. Here’s New York Governor Andrew Cuomo (D), as a canonical example:
This is probably one of the most destructive policies to the state of New York I’ve heard proposed in 30 years[.]
These providers, which surprisingly The Wall Street Journal misapprehends as insurers, are bracing for a drop in enrollment in the ongoing health plan provision program “turmoil.” There’s this key passage in the article at the link:
[M]any firms say they expect to lose consumers who will bear the full brunt of the rate increases—those who aren’t eligible for the health law’s premium subsidies, which help enrollees with annual incomes of less than around $48,000.
The NAR is objecting to the current tax reform plan’s essential doubling of the standard deduction to $12,000 for single filers and to $24,000 for married couples.
The Realtors are upset because they say this middle-class tax cut would make fewer taxpayers use the mortgage-interest deduction. The National Association of Realtors trashed the framework in a statement, saying it “would all but nullify the incentive to purchase a home for most, amounting to a de facto tax increase” and ensure “that only the top 5% of Americans have the opportunity to benefit from the mortgage interest deduction.”
The Wall Street Journalhas noted that the Trump administration has taken regulatory action to reduce, if not eliminate (the Supreme Court still has to do its job vis-à-vis a Little Sisters of the Poor case, as does Congress legislatively, contra a short handful of Republicans who prefer Obamacare intact over any step toward getting rid of it), the requirement that health plan providers provide contraception to women at no cost to those women coverees and do so regardless of any question of conscience or religious tenet.
Naturally, Progressive-Democrats and the Left generally have their collective panties in a wedgie over that. However, they carefully ignore certain inconvenient facts.
The Wall Street Journalhas misunderstood the situation and the proposal [emphasis added].
President Donald Trump’s executive order on health insurance, the most significant step so far to put his stamp on health policy, is designed to give more options to healthy consumers. It also could divide the insurance market in two.
What Trump is purportedly going to do with his Executive Order is
instruct federal agencies to loosen rules on health plans that the administration says have driven up premiums and reduced insurance offerings
Others [Republicans] say their desire to eliminate the [estate] tax must be balanced against other priorities including tax cuts for businesses and middle-class families.
This is disingenuous. Eliminating the estate tax explicitly favors middle-class families and businesses: it’s the small businesses and farms that are owned by middle class families that are the most harmed by this death tax.
Aside from that is this piece of irrelevancy:
Estate tax repeal would reduce federal revenue by about $239 billion over the next decade, according to the Tax Policy Center.
…of government regulatory failure. The Financial Industry Regulatory Authority, which regulates, among other financial institutions, brokerage houses, has its own investment portfolio. FINRA charges fees from those it regulates for their privilege of being regulated. And
In years when FINRA’s fee revenue exceeds forecasts and investment gains are strong, the regulator can rebate fees paid by firms it regulates.
Investment gains are strong. However, FINRA turns out to be a crappy investor, getting just two-thirds of the return since 2004, when the regulatory body’s investment portfolio was created, that a simple-minded standard portfolio mix of 50% each of bonds and stocks would have gotten in the same period. Its return shortfall, 3.4% vs that standard portfolio’s 6%, is a real money shortfall: $440 million for a portfolio of $1.6 billion.