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you're right that it would be more fair to keep AMT, but that's only because of the complexity of the tax code with all of its deductions and loopholes. but i

you're right that it would be more fair to keep AMT, but that's only because of the complexity of the tax code with all of its deductions and loopholes. but i disagree that the tax plan is not designed to be dstructive. the bill is tax gerrymandering at it's finest--designed primarily to boost the republican party, it's cronies, and especcially trump himself, while punishing all others, including the poor and powerless. it saddles the federal government with massive debt while providing tax breaks to those who least need it. there is simply no intent anywhere in this "tax reform" to actually improve our economy through good policy; it's rather designed to achieve purely political aims, destructiveness be damned. but more to the point, the proposed 409b section is about restricting when we can recognize income for tax purposes. while fictitious corporate "persons" are allowed to shift income and losses at will forward and backward along the timeline to avoid taxes, we humans, i.e. real people, cannot. this is simply the exact opposite of how the system should be designed. we should favor real people over fake people (especially over fake entities designed solely to completely shield already-advantaged owners from their failings and mistakes). even better, let's entirely remove the ability to move income and loss recognition through time for tax purposes. it's simpler and less prone to gamesmanship (i know that's more complicated than it sounds, but it's surely much less complicated than the current rules).

rayiner 9y ago
> let's entirely remove the ability to move income and loss recognition through time for tax purposes That would be incredibly stupid. It would mean that two companies could pay different amounts of tax over a given period simply based on whether they ran losses some years or booked consistent profits. Loss recognition through time isn't a crazy "loophole"--it's the mathematical byproduct of the fact that you're sampling a continuous variable at discrete intervals. Likewise for moving income. There is no special loophole that allows you to "move income." It's a byproduct of the fact that the income tax taxes income, and not revenues.
- clairity 9y ago
  you move revenue and expenses around in time to arrive at the income level you desire for a given time period using a variety of mechanisms: revenue recognition, IP transfer, capitalization, cost accounting, bonuses, transfer pricing, accelerated depreciation, etc. that's the whole point of tax advisors/accountants. you'll need to explain how it's "incredibly stupid". you allude to one of the potential consequences being differential taxation (which you didn't explain very well; but yes, losses in some taxing periods could mean you pay more in overall tax for the same total income over many tax periods). that's part of the "more complicated than it sounds" caveat in my prior post. but unlike you, i don't think it's all bad. for one, it would disincentivize excessive risk-taking (which lead to losses). and it would better align incentives between managers, owners and employees: it would be harder for executives to inflate income in one quarter and recognize the losses in another for the purpose of realizing undeserved bonuses for themselves. would that be so bad? (besides, it's already the norm that companies have variable income and pay different amounts of tax over a given period of time for the same overall income--e.g., the apple imbroglio).
myrandomcomment 9y ago
AMT is completely not fair. It was not indexed to inflation which means that it has started to affect middle class taxes. Go look at why it was created. The fact is if you are rich you can work around it. If you are mid to upper middle class you to not have enough money to structure things to work around it. AMT penalizes the middle class in the more expensive states to live as the salaries are higher. It is 100% unfair.

rayiner 9y ago

> let's entirely remove the ability to move income and loss recognition through time for tax purposes That would be incredibly stupid. It would mean that two companies could pay different amounts of tax over a given period simply based on whether they ran losses some years or booked consistent profits. Loss recognition through time isn't a crazy "loophole"--it's the mathematical byproduct of the fact that you're sampling a continuous variable at discrete intervals. Likewise for moving income. There is no special loophole that allows you to "move income." It's a byproduct of the fact that the income tax taxes income, and not revenues.

clairity 9y ago
you move revenue and expenses around in time to arrive at the income level you desire for a given time period using a variety of mechanisms: revenue recognition, IP transfer, capitalization, cost accounting, bonuses, transfer pricing, accelerated depreciation, etc. that's the whole point of tax advisors/accountants. you'll need to explain how it's "incredibly stupid". you allude to one of the potential consequences being differential taxation (which you didn't explain very well; but yes, losses in some taxing periods could mean you pay more in overall tax for the same total income over many tax periods). that's part of the "more complicated than it sounds" caveat in my prior post. but unlike you, i don't think it's all bad. for one, it would disincentivize excessive risk-taking (which lead to losses). and it would better align incentives between managers, owners and employees: it would be harder for executives to inflate income in one quarter and recognize the losses in another for the purpose of realizing undeserved bonuses for themselves. would that be so bad? (besides, it's already the norm that companies have variable income and pay different amounts of tax over a given period of time for the same overall income--e.g., the apple imbroglio).

myrandomcomment 9y ago

AMT is completely not fair. It was not indexed to inflation which means that it has started to affect middle class taxes. Go look at why it was created. The fact is if you are rich you can work around it. If you are mid to upper middle class you to not have enough money to structure things to work around it. AMT penalizes the middle class in the more expensive states to live as the salaries are higher. It is 100% unfair.