Despite a rising Fed funds rate and increasing inflation fears, rates on long term Treasuries have been coming down. Ben Eisen and Daniel Kruger report in The Wall Street Journal that some of the reason rates are falling is regulation-induced buying. Big companies are buying now to achieve a tax benefit coming as a result of the 2017 tax reform. They are funding pension plans now to receive the tax benefit they would have achieved under the 35% corporate tax regime, but will still only pay the 21% reformed rate. Eisen and Kruger write: S&P 500 companies are contributing … [Read more...]
State Tax Update: Are Yours Going Up?
On this site, I regularly highlight the good and bad of states' tax structure (read here, here, here, here, and here for starters). I want business owners, investors and retirees to have the best information possible in order to make their decisions about where to operate, live, and retire. Now, The Tax Foundation has released an update on state tax changes set to take effect on July 1. Some of these changes could be consequential to your income, purchasing power, or business operation. Take a look and see if any of these changes will affect you. From Morgan Scarboro and David Raymond at … [Read more...]
Landmark E-Commerce Decision by the Supreme Court
Today the Supreme Court has decided states are allowed to collect taxes from online retailers. Ten states already have laws requiring out of state sellers to notify buyers of taxes owed and to inform states of unpaid sales taxes. Retailers opposed the laws on the grounds that they had no presence in the states where taxes were being levied. In a 1992 decision, the Supreme Court ruled that companies with no physical presence in a state didn't need to collect that state's sales taxes. But now that online sales account for 10% of shopping, the old rule doesn't work anymore. The change in … [Read more...]
Viva Las Vegas!
Whether Las Vegas real estate is in a bubble or not--this article leans towards not—Californians are finding greener pastures away from Gov. Brown’s reckless policies. As I’ve noted in the past, the direction of individual states is a geographical portrait of right vs. left (wrong) ideologies. Eli Segall writes from the Las Vegas Review-Journal: Las Vegas home prices are rising at one of the fastest clips in the country, with builders fetching record dollar amounts and resale values approaching prior highs. The growth is so fast that, according to a new report, prices here are the most … [Read more...]
Vermont’s Relocation Grant, Really?
I keep a regular eye on the way states treat their citizens. I regularly warn readers here to avoid those states papering over their structural problems with higher taxes and freedom-restricting regulations. At the same time I applaud those states where entrepreneurs and businesses are rewarded for their hard work and innovation with lower taxes and greater liberty. One thing that is upsetting to me and probably to most Americans is when a state uses its tax dollars to reward a specific group. Picking winners is not in a state's best interest, nor is it good for that state's citizens. … [Read more...]
Voter Migration and What it Means to Your Family
Who needs to redraw state lines when states can be gutted from the inside out? That’s exactly what’s happening across the country to blue states that have abused their power of taxation for far too long. As the story goes, it’s true that demographics favor Democrats but dig a little deeper and you see that it’s geography that favors Republicans. Look at the mass exodus from blue states such as California and the migration into states such as Texas, Arizona, and Tennessee or East-Cali as I like to call them. Or the blue states of New England and New York that consider Florida and the … [Read more...]
Amazon Fights “Super Dangerous” Tax in Seattle
The city of Seattle, WA is considering the placement of a tax on big businesses that would charge them $0.26/hour per employee during the years of 2019 and 2020. The tax would then become a 0.7% payroll tax from 2021 onward. CNBC reports: Amazon Web Services CEO Andy Jassy said on Wednesday it's "super dangerous" for Seattle to consider taxing large companies — and risk dampening job creation — to offset the effects of gentrification and homelessness. In particular, Jassy was critical of the proposed "head tax," which would apply to 585 businesses with $20 million or more in yearly … [Read more...]
Will Democrats Buy-in to Tax Cut 2.0?
The Washington D.C. rumor mill is predicting an effort by the GOP to pass what has come to be known as Tax Cut 2.0. Republicans want to make permanent the individual tax cuts enshrined in last year's tax reform, and to make additional tax cuts. To get the cuts passed though, the GOP will need buy-in from at least 9 Democrats. Bloomberg reports: Democrats have assailed the new law as a giveaway to corporations and the wealthy, and they’ve called for drastic changes. “I’m ready to have a discussion with them. They want to fix some problems in the tax law? I want to fix some problems in … [Read more...]
Gary Cohn Takes his Tax Break and Leaves
After capturing a capital gains tax break on the Goldman Sachs stock he was "forced" to sell when he joined government, and preventing the Trump administration from cutting the carried interest tax break, and shepherding through a tax break that would definitely help his former employer, Gary Cohn is leaving the White House. There have been many reasons rumored as the cause of Cohn's exit. The official story is that he's against the President's announced tariffs, and so wants nothing more to do with the administration. That may be true to an extent, but it seems like there's more. Some … [Read more...]
An Unintended Consequence of Tax Reform
The tax reform law passed by Congress and signed by President Trump last year included a new rule that allowed businesses to immediately write off 100% of their asset purchases. The bill also allowed this treatment for used equipment that may have already been written off by another company. The WSJ reports that tax planners think companies may begin to shuffle around assets simply to take advantage of the tax treatment. Tax planners say the market for used equipment—including railcars, airplanes and industrial machines—is likely to heat up in the months ahead as firms try to take advantage … [Read more...]
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