Let’s hope that they pay 10% or less. American corporate executives have been overworked for a pittance, and are probably fleeing in droves to more business-friendly countries. People like to point at Rutledge, CEO of Charter Communications, Inc., with his $98,500,000 compensation in 2016 but if you broaden this to the top five Charter employees, their average salary was a more meager $42,500,000. And half of the CEO’s on the Fortune-500 had to make do with less than $12,000,000 in 2016! Yes, they got an average raise of over 8% compared with 2015, but when inflation is figured in, their average raise was only about $500,000. In contrast the Bureau of Labor Statistics reports that the median U.S. worker got a whopping $303 raise in 2016 (again in constant dollars).
With their crippling tax burdens removed at last, American companies will finally be able to pay enough in salaries and bonuses to attract competent executives! Make America Great Again!
Just to make sure everyone understands, the child tax credit reduces the amount of tax you have to pay by $2000.
The dependent deduction reduces the amount of tax you have to pay by ($4000 x your marginal tax bracket). For example, if you are in the 15% tax bracket, it reduces your tax by $600.
For your other dependents who do not qualify for the child tax credit, they added a $500 non-refundable credit for each non-child dependent that they call the “family credit.” This is also a “credit,” meaning it reduces your taxes by a straight $500 (but not below $0).
Note that you and your spouse are never your dependents. Under the old system, you would have had a $4000 personal deduction for each of you. That is eliminated with no replacement, unless you want to argue that the increased standard deduction is the replacement.
By the way, starting in the year your child turns 17, they are no longer eligible for the child tax credit. Even if they are a full time student in high school or college, they are no longer eligible.
It depends what you call a loophole. We generally tax corporate profit, i.e. revenue less expenses, which seems straightforward but there is often some question of what expenses count and when they count. Expenses that count typically include employee compensation. Pay out more and you have less profit to be taxed. That includes performance-based stock options to high-paid executives. As of earlier this week, that was being changed. https://www.google.com/amp/s/www.wsj.com/amp/articles/potential-loser-in-tax-overhaul-executive-stock-options-1513737409
I don’t really think that was a “loophole” but YMMV; it was showing up when I googled “list of corporate tax loopholes”
As David Brooks noted on the PBS News Hour yesterday: You can give away a lot of money for $1.5T dollars.
That is to say, borrowing that much money lets you hand out goodies like nobody’s business. Which is exactly what we are doing. Borrowing money so we can give out tax breaks, most of which will go to very wealthy individuals. I’m sure that has been said in this thread before, but it bears repeating.
One of the overlooked tax benefits is that is you are rich enough to fund a 529 account (tax free educational account for college), you can now use that money for private or religious schooling as well as college.
This is a break that really benefits the top few percent - and the schools, who now may raise tuition as this NYT article repsorts.
This doesn’t even make sense. Most parents save for college. Whether those who do so take advantage of a 529 plan isn’t a matter of whether they are “rich enough.” DC’s 529 is a high-fee junkpile last I checked. No thanks.
“Super funding” isn’t new. So do you know if something has changed that allows you to allow you to open an account with $200k? Because I don’t see how you could before.
This doesn’t add any sense to what you wrote. What do you mean by “rich enough”?
But I don’t think the contribution side of things changed with the new law, only that you can withdraw for K-12 expenses, not just post-secondary ones. So, there is more incentive to front-load the contributions than there was before.
Than, at the end of the year, you file a Form 709 “United States Gift (and Generation-Skipping Transfer) Tax Return” on whatever you put in the 529.
There’s a graph there that shows that a superfunded 529 will have 10% more cash than one that is not superfunded, too.
Other sites back up the $14,000 x 2 people x 5 years = $140,000 to start tho. And since what matters is how much someone gave and not how much was recieved in a given period, grandparents or others could each contribute up to $70k at the start of the 529 fund; not hard to imagine it getting to $200k right off the bat from people in the top few %, at least.
Perhaps poorly put as “rich enough” - I was trying to put across the point from the article about “super funding” which clearly takes a high income and the “three times the median income” comment which is pretty rich in many people’s estimation.
Here is another link that covers ways to get hundreds of thousands into a 529 in a single year. A great capital gains tax dodge if you have the money to take advantage of it.
Back to the tax reform, as discussed in the articles I cited, reform has given a huge boost to using 529s since they can now be used for private and religious schooling.