Manchin kills tax agreement (and now unkills it - Inflation reduction act)

Well as it stands, we are 19% below the 2010 level of IRS funding. And enforcement budget did increase a year ago.

Chart Book: The Need to Rebuild the Depleted IRS | Center on Budget and Policy Priorities

 

Because the GOP has been pushing for fewer and fewer IRS agents for years.

How the IRS Was Gutted — ProPublica

 

Yes, I included it in the prior post.

How the IRS Was Gutted — ProPublica

The GOP set out to decrease funding for the IRS and continually did it from 2011-2018, while they held control of Congress. They managed to cut the number of agents to the lowest level since 1953, when the country was much smaller. This resulted in far fewer audits. However, they still pushed for audits of EITC, so the effect was to dramatically lower the number of audits for those that made over $500K while barely changing the audits for those at the bottom of the income scale.

 

I don’t need to. Those are slanted stories intended for effect. And there are folks like you that lap it up like free pitchers a Joe’s Deli. Get a grip.

Im sure if you wanted to look into this you could figure out that if you made $10B, but have invested in major infrastructure, capacity, capability, or new product development equal to it greater you will not be paying taxes after all of your deductions and credits.

It’s all legal, in fact much of it is encouraged by our tax code. So sorry, Chuck Schumer, you could double the number of enforcement agents and you won’t gain a penny from Amazon.

 

So did any of them break the law. Don’t you think the IRS’s AI software wouldn’t flag the shit out of this.

Thank you for stepping forward from the left side to point out the “should be obvious”: Changes to the tax code are the way to go. But then you would stagnate a tremendous amount of economic growth if corporations did not get to deduct and receive credits for internal investment.

 

How is the story slanted? It's an Amazon official report. Are you accusing them of falsifying their data?

 

No, I’m accusing the writers of slanting something that is perfectly legal and has been for years into an accusation of wrongdoing. And I’m accusing you of trying to use it as a justification for this ridiculous pork bill.

If you don’t like Amazon for utilizing available means to reduce your tax bill; don’t shop there. If you donot like the similar tax deductions and credits that are available to you; don’t use them.

But please don’t post slanted bullshit to support bad legislation. This will add to inflationary pressures, not alleviate them. It is also a terrible waste of money.

 

SO dems caved on the minor carried interest rule and gave her the drought money as another inducement. so tired of good legislation being hijacked by one or two members. She needs to go and they should have told her to get on board or face a primary challenger without structural support next time.

Democrats reach agreement with Sinema on economic package, setting the stage for a Senate vote | PBS NewsHour

Sinema said Democrats had agreed to remove a provision raising taxes on “carried interest,” or profits that go to executives of private equity firms. That’s been a proposal she has long opposed, though it is a favorite of Manchin and many progressives.

The carried interest provision was estimated to produce $13 billion for the government over the coming decade, a small portion of the measure’s $739 billion in total revenue.

It will be replaced by a new excise tax on stock buybacks which will bring in more revenue than that, said one Democrat familiar with the agreement. The official, who was not authorized to discuss the deal publicly and spoke on condition of anonymity, provided no other detail.
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The final measure was expected to include assistance that Sinema and other Western senators have been trying to add to help their states cope with epic drought and wildfires that have become commonplace. Those lawmakers have been seeking around $5 billion but it was unclear what the final language would do, said a Democrat following the bargaining who would describe the effort only on condition of anonymity.

 

We know exactly what we are talking about. Are you ready for the mids? The American people are going to vote your Marxist azzes out of office in Congress and the Senate.

 

Hmmm... pulling the petulance rip chord, huh? I guess you can't debate him on merits.

 

I asked my VP of Tax, and she first told me to get off the internet, shook her head, and told me to post the following… brackets are my commentary.

1. the IRS budget and staffing is depleted relative to significant changes to the tax law that increased complexity since 1986. [Some here will chose to not believe this or think that is a good thing]. However, these are facts. The IRS have lost most of their most experienced agents [in “purge” by the anti-IRS administrations and their mega-donors].

IRS Budget and Workforce | Internal Revenue Service

Chart Book: The Need to Rebuild the Depleted IRS | Center on Budget and Policy Priorities

2. The examples of “zero” taxes and some of the rhetoric on both sides of this topic is unfortunately false. Income taxes for US companies is subject to a worldwide tax system and the deferrals under CFC regimes of the past (pre-2018) have been effectively eliminated. The tax expense within the financial statements that is being described is not the same as current cash taxes and certainly not just US taxes. US law has a system of foreign tax credits that can be used to reduce the double taxation problems. US versus foreign source income and foreign tax credit baskets are complex computations. A better look would be to trace through the cash flow statement for cash taxes. The proposed 15% min tax on companies with $1b average profit over a 3 year period is a good thing. [IMO, It was stupid to eliminate the corporate AMT system in 2017.] Further there are a number of uncertain tax positions in these financial statements that are misunderstood. Some comments have been about “illegal” and “IRS systems”… well, legality and grey areas of the law are where the lawyers and accountants come in to expose weaknesses in the system. The IRS has been investing in AI and other systems to find those areas of compliance risks. But, they are behind.

3. The global min tax and OECD Pillar II is something that is not yet ironed out in the Inflation Reduction Act language. There is a lot still coming.

 

The corporate share of federal revenues has dropped from about 1/3rd to about 7% or so over the last 70 or so years. More importantly, it is estimated that there could be as much as one trillion dollars of taxes that go unpaid every year in the U.S. The statements being made by Ted Cruz et al that 87,000 new IRS agents will be hired is a lie, and Ted Cruz knows it. However, the hiring of 87,000 or so new employees likely is true and makes complete sense. The IRS is terribly understaffed. It needs to be modernized to deal with all sorts of things from cryptocurrency transactions to efficiently handling the millions of returns filed each year to dealing with the millions of people who don’t file returns. The payoff can be huge if it results in even capturing 50% of unpaid taxes. FYI, I started my career as a tax lawyer for the IRS and went on in private practice to represent many companies and individuals in controversies with the IRS.

 

Related to the carried interest loophole, what was being protected


Hedge-fund billionaire Ken Griffin has shattered the Miami price record, shelling out $106.9 million for a waterfront estate.

It’s the most ever paid for a home in Miami-Dade County, and records show Griffin stole the record from himself. Last year, he set the previous all-time high when he dropped $75 million on a home on Star Island, an artificial island in Biscayne Bay.


Miami isn’t the only place Griffin has set a price record. In 2019, he shelled out $238 million for a New York penthouse — the most ever paid for a home in the U.S.


Ken Griffin buys 2 Miami homes for $106.9M - Tampa Bay Times

 

If anyone wants to know why Kyrsten Sinema blocked the elimination of the carried interest loophole.
Kyrsten Sinema’s donations from investors surged to nearly $1 million in the year before she killed a huge new tax on private equity and hedge funds
Kyrsten Sinema delivers a 'gift to private equity' in Democrats' big agenda bill
Kyrsten Sinema ensured a $14 billion tax break for private equity, hedge fund, and real estate executives remains intact. It's a win for many of her campaign donors.
She is one of the best Senators that money could buy. Said it many times before, the campaign contribution system defended primarily by Republicans/conservatives as "free speech" is nothing more than legalized bribery.