Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
Millionaires to reap 80% of benefit from tax change in US coronavirus stimulus
Guardian
Wed 15 Apr 2020 13.57 EDT
Millionaires and billionaires are set to reap more than 80% of the benefits from a change to the tax law Republicans put in the coronavirus economic relief package, according to a non-partisan congressional committee.
The change – which alters what certain business owners are allowed to deduct from their taxes – will allow some of the nation’s wealthiest to avoid nearly $82bn of tax liability in 2020.
Nearly 82% of the benefits from the tax law change will go to people making $1m or more annually in 2020, according to an analysis by the joint committee on taxation (JCT). Overall, 95% of individuals who benefit from the change make $200,000 or more.
Taxpayers will lose nearly $90bn from the change, which suspends a restriction introduced in the 2017 tax bill.
The change allows owners of businesses known as pass-through entities to lower their taxes by deducting as much as they want against income unrelated to the business.
Before, owners of pass-through entities could deduct a maximum of $250,000 in losses from non-business income such as stocks and bonds. This limitation was introduced in the 2017 tax law as a way to offset other tax benefits going to firms.
Republicans said it was a mistake to include the provision in the 2017 legislation and moved to temporarily suspend it in the $2tn Coronavirus Aid, Relief, and Economic Security (Cares) act passed in late March.
Because of the suspension, the JCT estimated 43,000 people making $1m or more would owe a total of $70.3bn less in taxes in 2020. Less than 3% of the benefits from the change will go to Americans earning less than $100,000 a year.
Steve Rosenthal, a tax expert at the Tax Policy Center, a non-partisan thinktank, told the Washington Post hedge-fund investors and owners of real estate would benefit most from the change.
The change – which alters what certain business owners are allowed to deduct from their taxes – will allow some of the nation’s wealthiest to avoid nearly $82bn of tax liability in 2020.
Nearly 82% of the benefits from the tax law change will go to people making $1m or more annually in 2020, according to an analysis by the joint committee on taxation (JCT). Overall, 95% of individuals who benefit from the change make $200,000 or more.
Taxpayers will lose nearly $90bn from the change, which suspends a restriction introduced in the 2017 tax bill.
The change allows owners of businesses known as pass-through entities to lower their taxes by deducting as much as they want against income unrelated to the business.
Before, owners of pass-through entities could deduct a maximum of $250,000 in losses from non-business income such as stocks and bonds. This limitation was introduced in the 2017 tax law as a way to offset other tax benefits going to firms.
Republicans said it was a mistake to include the provision in the 2017 legislation and moved to temporarily suspend it in the $2tn Coronavirus Aid, Relief, and Economic Security (Cares) act passed in late March.
Because of the suspension, the JCT estimated 43,000 people making $1m or more would owe a total of $70.3bn less in taxes in 2020. Less than 3% of the benefits from the change will go to Americans earning less than $100,000 a year.
Steve Rosenthal, a tax expert at the Tax Policy Center, a non-partisan thinktank, told the Washington Post hedge-fund investors and owners of real estate would benefit most from the change.
read more: https://www.theguardian.com/world/2020/apr/15/tax-change-coronavirus-stimulus-act-millionaires-billionaires
7 replies
= new reply since forum marked as read
= new reply since forum marked as read
