Can someone red pill me on Trump's pass through entity tax cut? From what I...

Fuzzy_Logic
Fuzzy_Logic

Can someone red pill me on Trump's pass through entity tax cut? From what I understand, he wants to remove the corporate tax which would only leave the self-employment tax of 15%~

Most people don't realize that business owners are subject to both the traditional income tax AND the self-employment tax which would mean someone making $100k/year has a marginal tax rate of almost 40%

Trump reducing this would me a MASSIVE boost in profits for small business owners around the country. This would put thousands of dollars back into the pockets of business owners which could be used to buy Ferraris or focus on other business ventures. Hell, in my case, it would ironically end up giving the government even more money since any leftover cash would actually be repatriated (not the right word, but you know what I mean) and paid taxes on instead of used to fund needless business expenses.

MPmaster
MPmaster

It's one of the best possible changes to the tax code that could ever be implemented.

massdebater
massdebater

Your information is all fucking backwards. This doesn't apply to small entities like LLCs which are electing to, usually, be taxed as self-employed income. This applies only to S-Corps and C-Corps, or LLCs opting to be taxed first at 40% before being hit with 18% on the remainder for long term capital gains...

...and as I write this out I see the fucking loophole. It isn't the one that you're thinking of OP, that one doesn't exist, but if someone with an LLC elected to be taxed as a corporation and was making sufficient money and opted for corporate tax and capital gains they'd be looking at a substantial tax cut.

This is probably more aimed at big business though, it only incidentally helps out small business owners.

Techpill
Techpill

If taxes aren't raised on the middle class, then I see no fucking problem cutting it for corporations. Fuck your taxes, make more jobs. That is all.

Sharpcharm
Sharpcharm

for you

Burnblaze
Burnblaze

I looked it up and I don't understand it. So the only thing changing is the corporate tax rate which pass-through entities are not affected by.

For businesses, Trump’s proposal would lower the corporate tax rate from 35 percent to 15 percent. It would also allow millions of small businesses, structured in such a way that they are affected by the individual tax rate, to use the 15 percent rate as well. These businesses, known as “pass-throughs” or “S corporations,” are often small, family-owned firms.

So what does that mean? Do business owners get some special personal income tax rate of 15% instead of the traditional brackets?

MPmaster
MPmaster

If taxes aren't raised on the middle class
great
so everyone richer than us gets plenty of tax cuts to further their horde of treasure while all our services get cut so we can be more dependent on shitty wagecuck jobs

go fuck yourself
kys
die in a fire
literally drop dead

girlDog
girlDog

How about you start your own business. You have the freedom to do that.

massdebater
massdebater

or how about I wait 44 more months until this fucking idiot is driven out of the white house, all of his garbage policies are immediately reversed

Snarelure
Snarelure

Basically individuals that receive income from a company, eg a salary or dividends pay income tax on the income they receive.

Corporate tax affects the profit of the business.

So a corporate entity (could be a small business) makes 100k after expenses. It has to pay corporate tax on the 100k. Then with the money left over it can pay dividends or retain the money in the corporation as an asset of the corporation.

So let's say a corporation is paying less corporate tax, so it increases its dividends. Now the individuals receiving the dividends pay personal income tax on the dividends. Personal tax rates can be higher than corporate tax rates, so probably more tax would be paid overall.

Now let's say the company retains its profits. It can invest that money in the stock market or wherever it likes. It makes a return on the investment and reinvests, all the while paying only corporate tax. Only when money comes out of the business is personal tax paid. So we a lot of money can be accumulated in a corporation, paying a potentially lower corporate rate... so a low corporate tax rate promotes investment.

Hope this helps.

StonedTime
StonedTime

If the company buys a Ferrari then it has to be used for business purposes. A company owner isn't supposed to use the company's resources for his own personal benefit. That would be stealing from the company, it is a separate entity.

Maybe you do promotional work for your company, so you argue you need a nice car, so there is this company car that you have use of. But you are actually supposed to separate personal and business use and there are fringe benefit rules so basically unless you are a tax fraud you are not going to buy yourself a Ferrari with company money.

LuckyDusty
LuckyDusty

because he wants handouts

AwesomeTucker
AwesomeTucker

Keep on dreaming bitch boy.

Booteefool
Booteefool

If taxes aren't raised on the middle class,
Taxes ARE being raised on the middle class because you're going to lose most of the deductions that kept your marginal tax rate reasonable. The mortgage interest deduction? Gone. The state tax deduction? Gone.

Not to mention, the effective price of home ownership will go up. Fuck the middle class, and fuck Millennials too. The dream of home ownership is going to be ever more distant now. Hope you enjoy paying rent to a wealthy landlord because Trump wants you to do it from cradle to grave..

farquit
farquit

73% of small (less than $16 million a year) US businesses are sole proprietorships, and small businesses are almost 99% of US businesses.

so this doesn't help US businesses in general.

we may see some of those sole proprietors incorporating or filing LLC's.

Any gain will presumably be offset by his cuts to the home office deduction which is a huge one for business owners.

as user up there says though, this ass-clown will soon be out of power, and congress will be flipped in very short order.

Raising taxes on the poor, middle class, and small business owners has been the republican wet dream for decades now. They're going to be the dog that finally caught the car only to get killed by it. This tax plan isn't going to be popular at all.

StrangeWizard
StrangeWizard

Letting the president dictate your job, you suck senpai..lol keep hoping for change next time around.

Nojokur
Nojokur

Why aren't you reporting losses for your company, paying no taxes that way, and just giving yourself a huge salary?

Crazy_Nice
Crazy_Nice

Everyone should have their own business. We need no employees. Just business owners

askme
askme

tfw make a living off my websites
am not allowed to move to the USA because I'm from West Europe and not from Nigeria. And don't employ 100 Mexicans or Indians in the USA

FastChef
FastChef

Realistically no matter who becomes president of this country your life will still be sad and shit and you'll probably keep blaming other people for your unsatisfying existence until you have a stroke at 31 because you're unhealthy both physically and mentally and then you'll live the rest of your life in a wheelchair and with only the most basic of motor function available to you, you will begin to resent everyone who ever took a chance on you or cared about you because they didn't try hard enough but no one will take your criticism seriously because you don't have a lot of cognitive capability after your stroke so eventually you'll get tired of being coddled like a subhuman and with no other available options you will become one of those old guys who yells at trees
I've seen it many times, kid
You need to get it together

Spazyfool
Spazyfool

I've seen it many times, kid
Every time you walk past a mirror

whereismyname
whereismyname

Roll*

likme
likme

You can get a business car for driving to and from work

FastChef
FastChef

You actually can not. The IRS specifically states that commuter miles, be it on a company car or not, to and from a regular place of work does not qualify as a deduction. This is why they tell you to keep a journal/log book and specify the percentage of personal vs. business use at the end of the year

With that said, I know literally no one that doesn't abuse this. Furthermore, there is a loophole where essentially you can deduct the storage/transportation of the vehicle . For example, if you do not have parking at your regular place of work, obviously someone has to take it home with them or store it somewhere. This is obviously deductible

Like I said though, no one does this by the book and it gets abused to all hell.

Nude_Bikergirl
Nude_Bikergirl

Businesses don't make jobs just because they have more money or out of the kindness of their own heart. Demand dictates whether or not they will hire more people if necessary to fill said demand.

This argument gets old.

Boy_vs_Girl
Boy_vs_Girl

This is obviously deductible
Trump's tax plan gets rid of this deduction as well.

cum2soon
cum2soon

*92 months

FTFY

lostmypassword
lostmypassword

Bush and Reagan both tried this approach, it didn't work either time. More recently Brownback tried this in Kansas and it failed so spectacularly he may never work in politics again.

There's no reason to think it will suddenly work now for Trump. The only question is if conservatives believe in it enough to cut their own throats by passing it.

they didn't repeal Obamacare, perhaps they're smart enough not to lower corporate taxes and taxes on the wealthy. But then lowering rich people's taxes is the only reason their party still exists.

Disable AdBlock to view this page

Disable AdBlock to view this page

Confirm your age

This website may contain content of an adult nature. If you are under the age of 18, if such content offends you or if it is illegal to view such content in your community, please EXIT.

Enter Exit

About Privacy

We use cookies to personalize content and ads, to provide social media features and to analyze our traffic. We also share information about your use of our site with our advertising and analytics partners.

Accept Exit