And Now For Corporate Taxes

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OK, it’s time to run down the “unified framework” proposals for corporate taxes. I’m going to try to choose my bullet points carefully. Here are the framework’s concrete proposals:

  1. The tax rate for partnerships and S corporations is reduced to 25 percent. The tax rate for C corporations (which includes most big companies) is reduced from 35 percent to 20 percent.
  2. Capital investments can be written off immediately, rather than being depreciated over a period of years.
  3. C corporations will no longer be allowed to write off 100 percent of their interest expenses.
  4. Foreign earnings can be repatriated at a 0 percent rate.
  5. Going forward, foreign earnings of multinational corporations will be taxed “at a reduced rate and a global basis.”

That’s the good news for corporations, and it’s presented with at least a little bit of detail. But then there are all the additional measures necessary to (partly) pay for this largesse. Here they are:

  1. In order to prevent millionaires from gaming the new lower rates, the framework “contemplates” that Congress will figure out measures to “prevent the recharacterization of personal income into business income to prevent wealthy individuals from avoiding the top personal tax rate.”
  2. Immediate expensing of capital investments is good, but maybe we need even more? Congress is expected to “continue to work” on enhancing expensing rules for small businesses.
  3. Corporations can no longer deduct interest expenses, but what about everyone else? “The committees will consider the appropriate treatment of interest paid by non-corporate taxpayers.”
  4. The framework keeps the R&D tax credit and the low-income housing credit. However, “numerous other special exclusions and deductions” will be eliminated.
  5. But not every special deduction will get the ax. Congress may decide to retain “some other business credits.” Naturally, this will be done only within existing “budgetary limitations,” which are not spelled out.
  6. And what about all the special deals for favored industries that litter thte tax code? The framework says only that it will “modernize” these special deals to ensure the tax code “better reflects economic reality.”
  7. Foreign profits of multinationals will be taxed at a reduced rate, but what about everyone else? The framework says that Congress will write rules to “level the playing field between U.S.-headquartered parent companies and foreign-headquartered parent companies.”

This whole thing is a huge nothingburger. There are a handful of concrete proposals, all of which we’ve been talking about for months, and then a series of punts on every single other aspect of the plan. Basically, this brief document is little more than a tweetstorm to Congress laying out a few vague desires and telling them to work out the details. It reminds me of a high school student who hasn’t done the work and tries to hide it in a term paper that uses wide margins, lots of prefatory throat clearing, plenty of space between paragraphs, and frequent appeals to “disagreements between experts.” This is not progress.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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