3 ms·

Would be great if this supported my situation, single member LLC (pass-through). Though probably not popular here on HN, the bill's goal is to reduce the burden

Would be great if this supported my situation, single member LLC (pass-through). Though probably not popular here on HN, the bill's goal is to reduce the burden of taxes on small business and corporations to promote repatriotization of capital back to the US.

nightski 9y ago
Didn't the House version support pass through entities but the Senate version threw it out to reduce the deficit (to avoid filibuster)? Still waiting to see what the rectified version looks like.
- scarmig 9y ago
  Well, the rectified version will be finished at 11:30PM some long Friday night and passed at 11PM the same evening, so you really won't have much a chance to look at it beforehand.
- ryanwaggoner 9y ago
  Nope. The House version is fairly complicated, but amounts to most non-service businesses treating 30% of the income as "capital return" and being taxed at 25%. The Senate plan started out as being a 17% deduction of pass-through income on 1040, and then got ramped up to 23% before being passed. It is limited to 50% of W2 wages paid by the pass-through and excludes a bunch of service industry categories, but both of those limitations only apply to businesses where taxable income is below $250k single / $500k married. I'm pretty aggressive on tax avoidance and even I'm surprised by how crazy this is. So in a hypothetical example, I'm married and earn $600k from a consulting business. After retirement contributions to a solo 401k, maybe some charitable / mortgage / property tax deductions, etc, I get my taxable income to $500k. Which means I get to deduct another 23% of the business income (23% x $600k = $138k), dropping my taxable income to $362. And the Federal income tax on that is $80k. Plus another $40k or so for SE tax. So $120k in Federal tax on $600k in income, or 20%. If you live in a no-tax state, then that's all you pay. That's pretty crazy.
madamelic 9y ago
>reduce the burden of taxes on small business and corporations to promote repatriotization of capital back to the US. The horror of giving a fair share to the country that supports your corporation. I think we should fine companies like Apple who bilk the US and refuse to bring back hundreds of billions until they get a sweetheart deal.
- nodesocket 9y ago
  It's not a sweetheart deal. US corporate tax rates are some of the highest in the entire world. It is just smart by Apple to ship capital off until it makes business sense. I suspect we are not going to agree about this though.
  - toomuchtodo 9y ago
    This is nonsense. The effective tax rate lands right in the middle of most OECD countries. https://www.npr.org/2017/08/07/541797699/fact-check-does-the-u-s-have-the-highest-corporate-tax-rate-in-the-world https://www.npr.org/2017/08/07/541797699/fact-check-does-the... https://www.cbpp.org/research/federal-tax/actual-us-corporate-tax-rates-are-in-line-with-comparable-countries https://www.cbpp.org/research/federal-tax/actual-us-corporat...
    - nodesocket 9y ago
      Did you even read the article you linked? There is a reason all the bay area tech companies have offices in Dublin Ireland... 12.5% corporate rate. > The long answer: The U.S. has the highest top corporate tax rate at least among advanced economies. Compared with nations in the OECD — the Organization for Economic Cooperation and Development, a group of highly developed countries — the U.S. has the highest top corporate tax rate in the world.
      - hirsin 9y ago
        From the rest of the article: > Factor In Deductions And Other Expenditures, And The U.S. Corporate Tax Rate Isn’t So High

nightski 9y ago

Didn't the House version support pass through entities but the Senate version threw it out to reduce the deficit (to avoid filibuster)? Still waiting to see what the rectified version looks like.

scarmig 9y ago
Well, the rectified version will be finished at 11:30PM some long Friday night and passed at 11PM the same evening, so you really won't have much a chance to look at it beforehand.
ryanwaggoner 9y ago
Nope. The House version is fairly complicated, but amounts to most non-service businesses treating 30% of the income as "capital return" and being taxed at 25%. The Senate plan started out as being a 17% deduction of pass-through income on 1040, and then got ramped up to 23% before being passed. It is limited to 50% of W2 wages paid by the pass-through and excludes a bunch of service industry categories, but both of those limitations only apply to businesses where taxable income is below $250k single / $500k married. I'm pretty aggressive on tax avoidance and even I'm surprised by how crazy this is. So in a hypothetical example, I'm married and earn $600k from a consulting business. After retirement contributions to a solo 401k, maybe some charitable / mortgage / property tax deductions, etc, I get my taxable income to $500k. Which means I get to deduct another 23% of the business income (23% x $600k = $138k), dropping my taxable income to $362. And the Federal income tax on that is $80k. Plus another $40k or so for SE tax. So $120k in Federal tax on $600k in income, or 20%. If you live in a no-tax state, then that's all you pay. That's pretty crazy.

madamelic 9y ago

>reduce the burden of taxes on small business and corporations to promote repatriotization of capital back to the US. The horror of giving a fair share to the country that supports your corporation. I think we should fine companies like Apple who bilk the US and refuse to bring back hundreds of billions until they get a sweetheart deal.

nodesocket 9y ago
It's not a sweetheart deal. US corporate tax rates are some of the highest in the entire world. It is just smart by Apple to ship capital off until it makes business sense. I suspect we are not going to agree about this though.
- toomuchtodo 9y ago
  This is nonsense. The effective tax rate lands right in the middle of most OECD countries. https://www.npr.org/2017/08/07/541797699/fact-check-does-the-u-s-have-the-highest-corporate-tax-rate-in-the-world https://www.npr.org/2017/08/07/541797699/fact-check-does-the... https://www.cbpp.org/research/federal-tax/actual-us-corporate-tax-rates-are-in-line-with-comparable-countries https://www.cbpp.org/research/federal-tax/actual-us-corporat...
  - nodesocket 9y ago
    Did you even read the article you linked? There is a reason all the bay area tech companies have offices in Dublin Ireland... 12.5% corporate rate. > The long answer: The U.S. has the highest top corporate tax rate at least among advanced economies. Compared with nations in the OECD — the Organization for Economic Cooperation and Development, a group of highly developed countries — the U.S. has the highest top corporate tax rate in the world.
    - hirsin 9y ago
      From the rest of the article: > Factor In Deductions And Other Expenditures, And The U.S. Corporate Tax Rate Isn’t So High