Minimum wage question: Why do democrats and liberals want to hurt people with no experience or skills?
Why do DC republicans want to hurt 99% of Americans instead of changing or closing these loopholes which don't benefit many middle class Americans one bit?
• 28 Percent Limitation on Certain Deductions and Exclusions ($482 billion) – Sec. 201
Lowers the cap on individual income tax breaks to 28%, providing a flat rate benefit for itemized deductions. Only 30% of taxpayers itemize their deductions. Further, the value of a deduction corresponds to an individual’s marginal tax rate – making itemization highly regressive. For example, itemized deductions totaling $10,000 reduce taxes for a person in the 15 percent bracket by $1,500 (15 percent of $10,000) but cut taxes by $3,900 for a person in the 39 percent bracket (39 percent of $10,000). While “itemizers” include individuals from all income levels, this proposal holds lower earners completely harmless, only affecting households earning above $223,000 annually.
• Close Carried Interest Loophole ($17 billion) – Sec. 201
Ensures that carried interest income from service partnerships is taxed as ordinary income. Hedge fund executives and other investment managers can currently count their share of the firms’ profits as an investment in the partnership rather than as a fee for service. This allows some of the highest-income Americans to pay much lower tax rates (15% in 2012 and 23% in 2013) than they would pay if their fee was correctly taxed as ordinary income (up to 39%), even though the funds they manage are not their own and managing the money is their job.
• Close Loopholes for Jets and Yachts ($4 billion) – Secs. 251 & 421
Removes tax advantages provided to owners of private jets and yacht owners. Current law enables owners of private airplanes to receive a more generous five-year depreciation instead of the seven years provided to commercial airlines. This provision allows a seven-year depreciation for all jet owners. Also, about 500,000 boat owners nationwide can decrease their income-tax bill every year by declaring their vessels a second home. This provision only permits people who use their boats as their primary residence to receive a tax benefit. (includes bill text from Rep. Quigley)
• Close International Tax System Loopholes ($161 billion) – Secs. 401-405
Closes corporate tax loopholes and cracks down on offshore tax abuses that encourage corporations to move jobs offshore. Offshore corporations that are managed from the United States would no longer be able to claim foreign status and dodge taxes on their non-U.S. income. In addition, the bill eliminates tax incentives for moving U.S. jobs offshore and transferring intellectual property offshore. The bill gives the Treasury Department stronger authority to take tough new actions to combat tax haven banks and jurisdictions that help U.S. clients evade taxes. (includes bill text from Sen. Levin and Rep. Neal)
• End Fossil Fuel Subsidies ($94 billion) – Secs. 301-311
Repeals tax breaks, financial assistance, exploration and development expensing, preferential tax treatment of royalties, and domestic manufacturing deductions, for oil, natural gas, and coal producers. Despite the fossil fuel industries being among the most profitable on earth, the U.S. government gives them tens of billions of dollars in subsidies through the tax code. The five largest U.S. oil companies earned about $1 trillion in profits over the past decade, yet in recent years, companies like Exxon Mobil and Chevron paid zero federal income taxes. These subsidies distort markets and are detrimental to creating a clean energy economy, reducing our reliance on oil, and cutting carbon pollution.
• Close Exclusion of Foreign-Earned Income Loophole ($71 billion) – Sec. 231
Closes an exclusion enabling U.S. citizens working abroad to avoid paying any federal U.S. taxes on incomes below $95,100 for individuals and $190,200 for couples. This allows citizens to shelter income and violates the principle that U.S. citizens with similar income should incur similar tax liabilities. This measure closes the exclusion, but retains the tax deductions and credits for taxes paid to a foreign government and housing benefits for U.S. citizens working abroad. (bill text from Rep. Tierney)
• Close Corporate Deductions for Stock Options Loophole ($25 billion) – Secs. 331-332
Repeals the “Facebook loophole” that allows a company to deduct stock options cashed in by an employee at the inflated current market value, rather than the original cost to the corporation. In addition, this provision would impose a $1 million cap on deductions related to stock options, the current standard applied to other types of executive compensation. (bill text from Sen. Levin)
• Close Estate Tax Loopholes ($23 billion) – Secs. 501-504
Closes estate tax loopholes to ensure that the value of the property is recorded consistently between estates and beneficiaries. It requires that all estates’ values be reported to the IRS, that grantor retained annuity trusts have a minimum ten year basis, and that generation skipping trusts have minimum and maximum terms. (bill text from Rep. McDermott)
• Close S Corporation Loophole ($13 billion) – Sec. 241
Closes a loophole that allows wealthy professionals, like lobbyists or lawyers, to avoid paying Medicare tax on their earnings. Under current law, businesses organized as S-corporations do not pay corporate taxes, and income earned is passed through to shareholders who report that income on their personal tax returns. But if these shareholders are also employees, they can choose to treat some of their income as business profit, which lets them escape payroll taxes. Newt Gingrich used this loophole to avoid paying $69,000 in Medicare taxes in 2010, by declaring much of his income as S Corporation profits.
• Reduce Corporate Meal and Entertainment Deduction to 25% ($70 billion) – Sec. 341
Lowers the corporate deduction of the cost of meals and entertainment to 25%. Current law allows businesses to write off 50% of the cost of meals and entertainment, even though eating and entertaining are personal expenses and this exception is subject to frequent abuse.