CDZ Wow! They are gonna pass it, so I'm going to take it, but wow, just wow!

Discussion in 'Clean Debate Zone' started by usmbguest5318, Dec 15, 2017.

  1. usmbguest5318
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    usmbguest5318 Gold Member

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    For the most part, multi-ten-millionaires and wealthier folks live where they live because it's where they want to live, not because the tax burden is higher or lower than some other place. (Nevermind that people in that wealth tier can and generally do declare their tax home to be whatever locality yields the minimum tax.)
     
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  2. william the wie
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    william the wie Gold Member

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    Only real disagreement is I am using a lower minimum wealth definition of wealthy of five million and up.
     
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  3. deanrd
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    deanrd Gold Member

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    You might want to do a little more research:

    Pass Through Taxes

    On top of that, the bill makes it very difficult for lawyers, engineers, doctors, consultants and other personal services providers, who make up a good share of small businesses, to qualify for the 25% rate.

    As Congress readies tax overhaul, an accountant explains its impact on Connecticut taxpayers

    As far as “pass-though” businesses, the final bill settled on a 20 percent deduction for these small businesses. What is a “pass through” and who might be helped in Connecticut by this new tax break?

    I think this new tax break will help a lot of companies in Connecticut, because there are a lot of family-run companies in Connecticut that are either an S-corporation, or a partnership or a sole proprietorship, and all those entities would be considered pass- throughs. So, essentially, they would be getting a 20 percent deduction to help reduce what they pay on their net income.

    What kinds of businesses would not be able to take advantage of this new tax break?

    Looks like companies that would not get that would be service companies. So that would be your law firms, your accounting firms, your consulting firms.

    So that’s going to cut out a lot of people, right? So the mom-and-pop shop will get it, but not the partnership of doctors down the street…?

    That’s right, because those are service companies.
     
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  4. usmbguest5318
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    usmbguest5318 Gold Member

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    Well, okay....

    Though the vicissitudes that drive economic decision making are not lost on me, I cannot say that I'm aware of how consumer behavior with regard to choosing a tax location varies the wealth gradation of one's being in the $5M+ range vs. those in the $10M+ range. Indeed, AFAIK, nobody has conducted a study that even closely enough aligns with such considerations that one could from them draw plausible inferences about how individuals in the respective wealth brackets choose their tax home.

    The relationship between wealth and consumption in general (elasticity) is well understood. After all, that relationship is a central concept in ECON101. It is in that understanding that one finds the practical reason why it's unlikely that anyone has studied as much: people in the $5M+ wealth bracket have few or no substantive restrictions on where they can purchase a house and thereby declare it as their tax home. One can say thus wealthy folks determine whether the excess of resources they expend as a result of declaring "this place" as their tax home rather than declaring "that place" as such provides enough (or not enough) satisfaction to motivate them to choose one or the other, but one cannot generalize that their tax liability is the sole or overarching determinant in their "calculs" to that end.

    Too, much is understood about the relationship between risk aversion and wealth. However, insofar as the risk of incurring a given, or even higher/lower than elsewhere, tax burden as a function of the siting of one's tax home is effectively 100%, such a decision doesn't much involve risk aversion (behavioral economics), but rather derives from simple elasticity (positive economics), i.e., whether one is willing to spend the money or not. About the only risk-aversion-related element pertains to the extent to which one is willing to take a few simple actions such as titling one's car there and holding a driver's license from the state in question.
     
  5. usmbguest5318
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    usmbguest5318 Gold Member

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    As with so much about the tax code, the exceptions to the rules (aka "loopholes") are every bit as important as are the rules themselves.
     
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    Last edited: Dec 18, 2017
  6. william the wie
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    william the wie Gold Member

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    The difficulty is non-proprietary economic models are based on the calculi while geography, operations research and logistics require finite math. Multiple iterations and the rest of finite math give radically different and more accurate predictions but that requires a lot more computing power than econometric models. For example vertical integration of caregivers, big pharma, insurance and medical equipment with nationwide coverage to replace Obamacare is going to get really strange quick if Trump gets it passed. You can get a good first cut by simply asking your vendors about current vertical integration attempts.
     
  7. william the wie
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    william the wie Gold Member

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    Total agreement.
     
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  8. task0778
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    task0778 Gold Member Gold Supporting Member Supporting Member

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    Xelor: " What does that mean? It means that if one earns one's income via an S-corp, partnership or sole proprietorship, one can deduct the entirety of SALT paid. "

    Me: This is unsubstantiated and I believe untrue. Nowhere on the web does it say that the final tax bill has that provision. Seriously, are we to believe that NONE of the numerous detractors of this piece of legislation saw this? You can bet what you like that they would be screaming their outrage to the rooftops if this were true? Xelor's statement is true for the current existing tax code, but the new tax law limits the SALT deduction to a maximum of $10,000. I have yet to see any loopholes or exceptions to that.
     
  9. usmbguest5318
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    usmbguest5318 Gold Member

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    I cannot do anything about what you do or don't believe. I can only provide links to credible references and leave the remainder to you. I provided the links; the burden is thus on readers and would-be commentators to read the content at the linked webpages.

    About what "this" do ask? Assuming you want a summarization of what you'll discover after reading the content to which I provided links, it's this: provided they qualify for the exception(s), individuals who have an ownership stake in pass-through entities can take more than $10K in SALT deductions.
     
  10. task0778
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    task0778 Gold Member Gold Supporting Member Supporting Member

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    You have NEVER provided any link, credible or not that says that " if one earns one's income via an S-corp, partnership or sole proprietorship, one can deduct the entirety of SALT paid. " in any way shape or form. For the simple reason that it does not exist and never did. You are totally inventing something out of nothing with no supporting evidence whatsoever and I will waste no more time on you.

    And i leave to everybody else: can anyone find anything anywhere that supports Xelor's assertion that anyone who have an ownership stake in pass-through entities can take more than $10K in SALT deductions? Clearly he can't. So show me the link please and we can end this nonsense.
     

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