![]() The Times article says that officials with Congress’s revenue estimator, the Joint Committee on Taxation, expect that the rules related to the BEAT alone would reduce revenue by $50 billion compared to what was expected when the law was enacted. Treasury gave the companies what they wanted-exceptions to the GILTI and BEAT provisions that sometimes go beyond what would be allowed by any reasonable interpretation of the law itself, creating one of the exceptions “out of whole cloth” as one law professor put it. The Times explains that the “blitz was led by a cross section of the world’s largest companies, including Anheuser-Busch, Credit Suisse, General Electric, United Technologies, Barclays, Coca-Cola, Bank of America, UBS, IBM, Kraft Heinz, Kimberly-Clark, News Corporation, Chubb, ConocoPhillips, HSBC and the American International Group.” These payments are often used to shift profits abroad.Īlmost before the ink was dry on the hastily drafted tax law, corporations lined up to lobby the Treasury Department, which was tasked with writing regulations to implement these and other provisions. GILTI was already destined to be ineffective because it was drafted to apply at only half the 21 percent rate imposed on domestic profits and exempt many profits altogether.Īnother provision is the Base Erosion and Anti-Abuse Tax (BEAT) which taxes certain payments, like interest payments between “related” corporations that are really just parts of the same company. One of those provisions is the Global Intangible Low Taxed Income (GILTI), which is a tax on offshore profits of American corporations. Investigative reporting late last year by The New York Times that is now backed up by the Congressional Budget Office shows that the Trump administration unilaterally provided a second tax cut to corporations by writing rules that significantly weaken the few provisions in the 2017 Trump-GOP tax law that were supposed to restrict offshore tax dodging for corporations. Previous ideas that have been floated include everything from providing a bigger break for capital gains that mostly flow to the rich to an ill-advised reduction in the payroll tax that funds Social Security.Īll of this distracts from the failure of the first tax cut and the fact that the administration is already providing a second one to corporations without any involvement from Congress. Treasury billions, was implemented largely out of the public’s view.Īdministration officials refer to the possibility of another tax bill as “tax cuts 2.0,” and they have publicly tossed around ideas for what could be in such a plan almost since the enactment of the 2017 law. The second round, already costing the U.S. ![]() ![]() If President Trump puts forth another tax proposal this year, as he is hinting, it will be his third. ![]()
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