The National Association of Realtors Objects

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.”

Estate Tax and Tax Reform

Senate Republicans seem unable to understand this subject, also.

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.

Some Early Thoughts on the Tax Reform Proposal

…triggered by Laura Saunders’ piece in Wednesday’s Wall Street Journal.

Beginning with the headline and thesis of her piece: Winners and Losers Under the Trump Tax Plan. Because Government should be about picking winners and losers instead of just protecting a level free market for all.  Sure.

Now a couple of specifics.

People with large medical or disaster deductions. Each of these write-offs on Schedule A has significant hurdles and is only available to taxpayers with large unreimbursed expenses

Raise Taxes, Don’t Lower Them

That’s what the European Commission says is the correct thing to do.

The European Commission said the EU should proceed with an overhaul of taxes on digital firms even if the rest of the rich world did not follow suit, a draft report said.

And to the point:

The document is part of an EU push to tap more revenues from online multinationals such as Amazon and Facebook, who are accused of paying too little tax in Europe by routing most of their profits to low-rate countries such as Ireland or Luxembourg.

Tax Reform and Legislation

Business CEOs want tax reform.  They’re right, even though to an extent their wish is self-serving.  Or because of that—Adam Smith’s invisible hand, and all that, where every economic actor seeing to his own self interest aggregates to the benefit of all the actors, including those not party to a particular arrangement among particular actors.

Which brings me to a (not very) tangential point regarding a remark by Business Roundtable President & CEO Joshua Bolten regarding target tax rates:

15% would be terrific….  But it doesn’t have to end up at 15% for Business Roundtable companies to be happy about it.

Tax Incentives and Taxes

New York City is offering almost $10 million in tax breaks to get Aetna Inc to move from Connecticut to Manhattan, and this is in addition to $24 million the state is offering.

It’s a good deal, for Aetna, but it’s not a good deal for the people of New York City, or for the citizens of New York State or for the citizens of the United States.  The reason is hinted at by Anthony Hogrebe, Senior Vice President of Public Affairs for the New York City Economic Development Corporation:

False Premise

Budget mavens, politicians, and the NLMSM have one regarding our national tax code.  The Senate is considering a budget that sets an outer bound on the size of Federal tax cuts.

A budget with a tax plan that is revenue-neutral would effectively pay for itself, meaning any reduction in tax rates would be offset by reducing breaks or other revenue-raising measures.

No.  “Revenue neutral” must also consider what’s done with the revenue collected.  Revenue neutrality can be achieved, also, with sufficient spending cuts so that revenue collected meets or exceeds spending outflows.

Prioritize, Guys

President Donald Trump’s national infrastructure plan centers on glorified seed money directed to the localities looking to improve/build out their infrastructure.  The idea is that the locals know their needs best, those needs should be funded primarily locally or from within the nation’s private economic sector, and the building out will aggregate into a vastly improved national infrastructure—real bottom up development, with a little help from the Feds.

To that end, Trump is going to propose $200 billion in Federal spending be committed to a total $1 trillion infrastructure development collection of projects (OK, considerable help).

Corporate Taxes

The US has one of, if not the, highest tax rate on businesses in the world, at 35%.  As a result, our internationally operating businesses book their profits in their overseas jurisdictions and leave those profits there.  This much is well known.

Republicans want to lower the corporate-tax rate and let companies bring future global profits home without paying US taxes on top of foreign taxes. They are searching for a way to do that without giving companies an incentive to move more operations and profits to countries with far lower taxes.

Or so they say.

Tax Reform and Charities

Charities stand to lose billions in donations if Republicans advance their tax overhaul, prompting the nonprofits to carefully attempt to persuade lawmakers to reshape their plan.

As a result of a proposal to double the standard deduction and prevent people from deducting state and local taxes from federal taxable income, fewer taxpayers—5% instead of 30%—would have a financial incentive to itemize their deductions, including their charitable gifts, according to several estimates.