Welcome to DU! The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards. Join the community: Create a free account Support DU (and get rid of ads!): Become a Star Member All Forums Issue Forums Culture Forums Alliance Forums Region Forums Support Forums Help & Search

CousinIT

(9,151 posts)
Sat Mar 28, 2020, 08:22 PM Mar 2020

ANOTHER tax cut for the 1% (Trump) buried in the stimulus

https://www.cnn.com/2020/03/28/opinions/stimulus-bill-tax-break-for-1-mccaffery/index.html

. . .

Now here is what changed in the historic $2 trillion stimulus bill. Previously, if a married couple had depreciation deductions that exceeded their real estate business income, the couple could claim that "loss" to write off taxes on a maximum of $500,000 in income from other sources, like wages from a day job.

Under the change, our rich taxpayer couple -- and this applies only for individuals, not corporations -- can now deduct an unlimited amount of "excess losses" in real estate against income from other sources. So now real estate moguls with lucrative day jobs or bountiful capital gains from other investments can go back to living tax-free, the Kushner way, before limits were put in place as part of the 2017 tax reform bill.

It gets worse, if that's possible. The change applies to this year -- and retroactively to 2019 and 2018. This means rich people can file amended returns now, and get refunds of perhaps millions of dollars, sooner than we can produce the number of ventilators we might need for the coronavirus crisis.

Let's pause for a moment to review: The new relief provision only benefits those who can list more than $500,000 in excess business losses -- typically artificial losses from depreciation that have more than wiped out their business income on paper -- AND more than $500,000 in other income from wages or other sources now that the cap on the tax break has been removed. Pity such people in a time of pandemic? Congress did.

Who are they? The Times and other accounts refer to this category as the "top 1%" of taxpayers, according to Internal Revenue Service data. These are people who are likely making millions, writing off millions more in paper real estate losses, all the while really hating the taxes they must pay.

I, personally, do not know any such people, and I suspect few readers do. But I have a hunch that some of them could have been found at Mar-a-Lago, where perhaps a piano played "As Time Goes By" while a record number of Americans across the country file for unemployment.
Latest Discussions»General Discussion»ANOTHER tax cut for the 1...