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Old 02-01-2018, 08:05 AM   #2501
raradevils
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Re: 2017 "Tax Reform": They'll Screw This Up Too, Right?

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Originally Posted by goofyballer View Post
Why? I could afford to but choose not to. Instead of paying hundreds of thousands to a bank to loan money for 30 years or whatever I have my cash growing in investments. Calculators like this one confirm that buying a home would be a terrible financial decision (my rent is controlled and under $2000; even at double that I'm better off now than if I bought a home for $1m).



I'm sorry to hear that; if the SALT deduction doesn't hit you hard then your house must not be worth that much and/or you must not make as much as you're letting on.
I'm sure you are. There are a lot of factors that go into how hard SALT hits you the most important is the cost of local property taxes. If I lived in any one of the neighboring counties or town it would have a greater impact. Specifically Essex or Bergen when I would be taxed in excess of 50k/year for the same house.
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Old 02-02-2018, 01:28 PM   #2502
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Re: 2017 "Tax Reform": They'll Screw This Up Too, Right?

Just got an email from our hr head (fortune 500 chemicals company) saying the company's tax rate will decrease "moderately" and benefits from tax reform will be used to reinvest in the company.
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Old 02-02-2018, 03:20 PM   #2503
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Re: 2017 "Tax Reform": They'll Screw This Up Too, Right?

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Just got an email from our hr head (fortune 500 chemicals company) saying the company's tax rate will decrease "moderately" and benefits from tax reform will be used to reinvest in the company.
Well, if that means upgrading physical plant/hiring more people/bumping pay that's nice.

If it means they're going to buy back a bunch of outstanding stock, not so good.

MM MD
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Old 02-02-2018, 03:33 PM   #2504
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Re: 2017 "Tax Reform": They'll Screw This Up Too, Right?

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Originally Posted by stringbettor View Post
Just got an email from our hr head (fortune 500 chemicals company) saying the company's tax rate will decrease "moderately" and benefits from tax reform will be used to reinvest in the company.
I hope this does not come across as insensitive to workers, but that is typically the correct thing to do for most companies.
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Old 02-02-2018, 04:55 PM   #2505
stringbettor
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Re: 2017 "Tax Reform": They'll Screw This Up Too, Right?

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Originally Posted by hobbes9324 View Post
Well, if that means upgrading physical plant/hiring more people/bumping pay that's nice.

If it means they're going to buy back a bunch of outstanding stock, not so good.

MM MD
Email did not mention buybacks so that's good. Emphasized capital expenditures and innovation, which is good, but implied that wages will not increase. Looked up their tax rate and if I'm doing it right it is less than 25% already so don't know what the new rate will be.
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Old 02-02-2018, 07:41 PM   #2506
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Re: 2017 "Tax Reform": They'll Screw This Up Too, Right?

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Originally Posted by hobbes9324 View Post
Well, if that means upgrading physical plant/hiring more people/bumping pay that's nice.

If it means they're going to buy back a bunch of outstanding stock, not so good.

MM MD
Either way it validates the more liberal economists' predictions and invaliding the more conservative predictions. The liberal economists predicted that the corporate tax fell mostly on employers and not on employees and what you're seeing is a company saying "we're taking all the benefits of the tax cuts" meaning they're in a position to reap all (or most) of the benifits. I guess we'll see. Of course it's just one company so it's not enough to draw a holistic conclusion from.
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Old 02-03-2018, 09:52 AM   #2507
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Re: 2017 "Tax Reform": They'll Screw This Up Too, Right?

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The NYT had a very good piece pointing out that the bonuses promised by many corporations following the tax cut are often less consequential than they appear. For example, many companies highlighted their maximum bonus amount. This was often a figure (e.g. $1,000) that went to a full-time worker who had been with the company for twenty years or more. At a company like Walmart, very few of their workers would have been there for twenty years and many are part-time. This means that the typical worker would receive much less than the hyped $1,000 bonus.

However the most remarkable aspect of the bonus game is the fact that a bonus could be tax deductible in 2017 even if it was not paid until 2018. This inexplicable (on policy grounds) quirk in the tax code gave corporate America an enormous incentive to announce bonuses at the end of last year, since bonuses announced in 2017 cost much less money than bonuses or pay increases announced and paid in 2018.

If a company like Walmart or AT&T gave its workers $100 million in bonuses or pay increases in 2018 it would cost the company $79 million in after-tax profits, given the new 21 percent corporate tax rate. However if the same $100 million bonus was announced before the end of 2017 it would only cost the company $65 million in after-tax profits, since it could be deducted in a year when the tax rate was 35 percent. (These calculations assume that the companies actually pay the marginal tax rate.)

This means, in effect, that the government would have been paying these companies $14 million to announce a bonus before the end of the year. Since we all believe that companies respond to incentives, it should not be surprising that many announced bonuses before the end of 2017.
http://cepr.net/blogs/beat-the-press...ut-its-tax-cut
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Old 02-03-2018, 10:33 AM   #2508
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Re: 2017 "Tax Reform": They'll Screw This Up Too, Right?

If I worked somewhere for 20 years and barely qualified for a $1000 bonus I'd be pissed off. Why the **** is everybody so impressed with puny bonuses?
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Old 02-03-2018, 10:53 AM   #2509
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Re: 2017 "Tax Reform": They'll Screw This Up Too, Right?

Because a generation of right wing propaganda has done its job.
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Old 02-12-2018, 05:29 PM   #2510
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Re: 2017 "Tax Reform": They'll Screw This Up Too, Right?

Just like everyone said, though I would imagine the 13% is probably on the optimistic side

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A survey released this week shows that analysts expect only 13 percent of companies' savings from the new tax law to go to workers in the form of bonuses, raises and employee benefits.

Morgan Stanley analysts predict that 43 percent of the savings will end up in the hands of investors in the form of stock buybacks and dividends.
http://thehill.com/policy/finance/37...-go-to-workers
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Old 02-15-2018, 11:49 AM   #2511
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Re: 2017 "Tax Reform": They'll Screw This Up Too, Right?

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Under pressure from industry lobbyists and exploiting a split among White House advisers, the Republican Congress in December failed to fulfill Trump’s promise to end the tax windfall enjoyed by money managers. And lawmakers may have stumbled in trying to narrow their tax advantage, writing the new carried-interest rule in a way that provides firms an easy escape.

The rule requires hedge funds and private-equity players to hold investments for at least three years to get the lower capital gains rate, rather than one year under the old law. Otherwise, they must pay the higher income tax rate.

The rule, however, exempts carried interest from the longer holding period when it’s paid to a corporation rather than an individual. To the surprise of legal and accounting experts, the law didn’t specify that it applied solely to regular corporations, whose income is subject to double taxation.


Hedge funds are preparing to exploit the wording: Managers are betting that by simply putting their carried interest in a single-member LLC -- and then electing to have it treated as an S corporation -- the profit will qualify for the exemption from the three-year holding period and be taxed at the lower rate. The maneuver by money managers contributed to a 19 percent jump in the number of LLCs incorporated during December in Delaware.
https://www.bloomberg.com/news/artic...urce=applenews
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