Thread by @SethHanlon

The Republican tax bill looks like it was written by Donald Trump’s accountants and tax lawyers, and I’m not even joking. 1/

It would be hard to design a tax plan more friendly to billionaire real estate magnates like the Trumps and Kushners of the world. 2/

Where to begin? How about the “Trump Loophole” – the special low tax rate for wealthy “passthrough” owners. (Sec. 1004 of the bill.) 3/

Passthrough businesses are entities like partnerships, LLCs, and S-corps that don’t pay corporate tax. 4/

The Trump Organization is comprised of 500+ passthrough entities. The Kushner Companies are also structured as LLCs. 5/

Currently, millionaires and billionaires pay a 39.6% rate on passthrough business profits. Sec. 1004 of the bill cuts that rate to 25%. 6/

We’ve estimated that Trump could get a $23M annual tax cut, & Jared Kushner $6-17M, from this new loophole. 7/

americanprogressaction.org/issues/economy…

All told, it’s a $450 BILLION tax cut, overwhelmingly for millionaires. (Could be more if the loophole is gamed more than JCT expects) 8/

Next, we go to Section 1602 of the House Republican bill, which repeals the tax on multimillion-dollar estates. 9/

If Trump signs an estate tax repeal into law, the tax windfall for his heirs could be more than $1 BILLION. 10/
nytimes.com/interactive/20…

Of course it’s not that surprising that a GOP tax bill would repeal estate tax. (which applies only to the wealthiest 1 in 500 estates) 11/

What IS a surprise is that while the bill repeals the estate tax, it ALSO keeps in place the giant loophole known as “stepup in basis.” 12/

That loophole allows ppl to accumulate huge amounts of wealth & never pay income taxes on it during their lifetime. 13/

Now their heirs will inherit tax-free as well. 14/

Even when G.W. Bush repealed the estate tax (temporarily), he reformed “stepup” to ensure huge fortunes wouldn’t go untaxed forever. 15/

This Trump-GOP bill is much more extreme, in that respect. All gain, no pain, for wealthy heirs. 16/

Moving on, we come to the parts of the bill that actually do a little bit of “tax reform,” not just tax cuts. 17/

For example, section 3303 repeals “like-kind exchanges,” which allow people and companies to swap assets w/out paying capital gains tax. 18/

But wait! One industry is carved out of this reform, so that they can continue using like-kind exchanges. Hmmmm. 19/

In combination with “stepup,” like-kind exchanges can let real estate developers avoid cap gains tax on their properties indefinitely. 20/

That’s a sweet deal for the Real-Estate-Developer-in-Chief. 21/

Section 3301 also limits the deductions that businesses can claim for interest payments. 22/

But what do we have here? Another special exception for real estate businesses! They’re carved out of the new limits. 23/

Remember, Donald Trump called himself the “King of Debt.” Trump Org. interest deductions are untouched. 24/ politico.com/story/2016/06/…

And I can think of another RE developer who's prob relieved he can still write off interest on his large debts. 25/
bloomberg.com/graphics/2017-…

Finally, we come to section 2001, repealing the Alternative Minimum Tax. 26/

The AMT is a backstop to the regular income tax, ensuring that high-income people pay at least some tax. 27/

We’ve seen one year of Donald Trump’s tax returns, from 2005. That year, he paid $31 million in AMT. 28/

Without the AMT, he would have paid a tax rate of less than 4% that year. AMT is repealed in this bill. 29/

So, to sum it all up, I don’t know how this bill could be friendlier to Donald Trump, while raising taxes on many middle-class families. 30/

The ultimate outrage is that the Republican members of the Ways & Means Committee, which will be voting on this bill this week... 31/

..., have repeatedly blocked efforts to obtain Trump’s tax returns. 32/

msnbc.com/rachel-maddow-…

The Committee has unilateral power to obtain Trump’s tax returns – but the majority Repubs have voted down the Dems’ attempts to do so. 33/

They’re now rushing fwd on the bill w/out a single hearing to scrutinize special deals for ppl like Trump or impact on regular fams. 34/

If you’re as outraged by this bill and the process as I am, please call yr member of Congress and demand #NotOnePenny for Donald Trump. 35/

Here are the Committee Republicans who will be voting on the bill this week. We need to light their phones up & give them an earful. 36/

Call 202-224-3121 or go to:

notonepenny.org
trumptaxscam.org
stoptrumptaxcuts.org
TrumpTaxToolKit.org

37/

I’ll keep this thread open as we continue to dig through the bill. 38/

UPDATE: NYU tax law professor @davidckamin has discovered ANOTHER potentially huge loophole for Trump - this one is a doozy. 39/

Would you believe the House GOP bill takes away your ability to deduct state & local taxes but keeps that tax break for Donald Trump? 40/

As David explains, it looks like "passthrough" business owners like Trump are exempted from "SALT" repeal. 41/

41/

medium.com/whatever-sourc…

(SALT = Acronym for the tax deduction for State And Local Taxes.) 42/

Trump & Sec'y Mnuchin have often alluded to SALT repeal to suggest that people like them would lose tax breaks under their plan. 43/

But, it turns out, they're only taking away SALT for workers - not for business owners or investors like them!!! 44/

There is zero chance that the rank-and-file members of the Ways & Means Committee have thought through this issue. 45/

They may not even be aware of it. And the markup STARTS TOMORROW! Again, leaving this thread open b/c we are still scouring the bill. 46/

UPDATE: I just realized another way this bill is extra-friendly to Donald Trump. 47/

Back in May, Trump was talking about all the crazy deductions in the tax code that he benefits from, implying that he'd get rid of them. 48/

He said that he gets deductions for "birds flying across America." It sounded nutty, but he was actually talking about a real deduction. 49/

As Politifact explains here, he was referring to charitable deductions for "conservation easements." 50/

politifact.com/truth-o-meter/…

Those are where a landowner promises not to develop on his property for conservation purposes (e.g. to protect migratory bird patterns). 51/

And since the land is, in theory, worth less if it can't be developed, the owner claims a charitable deduction for the foregone value. 52/

Many of those deductions are legit. Some are not. One particularly suspect category is conservation easements on golf courses. 53/

As @RichardRubinDC reported, Trump's pretty clearly taking big deductions for easements on his golf courses. wsj.com/articles/donal… 54/

That's pretty shady. Trump basically admitted it's shady. So you'd think it's the type of thing a "tax reform" bill should clean up. 55/

In fact, the Obama Administration proposed ending conservation easements on golf courses, among other reforms. 56/

But in the House GOP "tax reform" bill, there's no reform of conservation easements. The "birds flying over America" deduction lives on. 57/

This is sort of like the tax code equivalent of Trump saying he could shoot someone on 5th Avenue and get away with it. 58/

Trump went on national TV and said he deducts "birds flying over America" from his taxes AND THIS BILL PRESERVES THAT DEDUCTION FOR HIM. 59/