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Last week's tax news
Tax News for July & August 2019
This week in tax news focuses on the California tax return law, Elizabeth Warren's proposed wealth tax, and company movement to the United States!
Period: July 29 - August 04
Tax Topic: California governor signs the Presidential Transparency & Accountability Act
Why is it a Tax Story?
As we all know, President Trump and his infamous tax returns have been in the news lately. By refusing to publicly release his New York State tax returns, Trump has caused quite the stir in the media. The Trump tax return story got a lot more interesting this week when the governor of California passed the Presidential Transparency & Accountability Act. The bill places direct requirements upon Trump (and any other presidential candidate) hoping to run in the California primary.Tax Story Summary:
- The bill is called the Presidential Tax Transparency & Accountability Act
- The bill requires all presidential candidates to publicly provide their tax return for the past five years if they plan to run on the state's primary election ballot
- Trump's personal attorney already put out a statement stating Trump will challenge the bill in court
- Trump can additionally avoid the bill by simply not running in the California primary
- With expected little competition, Trump could still win the Republican nomination without California
Will we ever see Trump's tax returns? Let me know what you think in the comments!
Tax Topic: Elizabeth Warren's Proposed Wealth Tax
Why is it a Tax Story?
We saw the second rounds of the Democratic Debate this past week, meaning we got to hear policy discussions relating to potential tax changes and tax laws. Elizabeth Warren continued to promote her plan for a wealth tax. Many people consider the tax unconstitutional, but Warren remains confident the tax plan will work. So, what exactly is Warren's wealth tax plan?
What are your thoughts on Warren's Wealth Tax? Can such a tax work?
Do you see more and more companies coming back to the U.S. in the near future?
Tax Story Summary:
- Warren's Wealth Tax implements an annual wealth tax on all assets over $50 million
- By the way, a wealth tax is a tax on the market value of assets owned; so, for example, a wealth tax taxes your cash (checkings, savings, other funds), stocks, property, trusts, businesses, etc.
- Warren's tax plan includes a 2% tax on all assets above $50 million, and a 3% tax on every dollar of net worth above $1 billion
- Warren projects the wealth tax will raise $2.75 trillion in tax revenue
- Twelve European countries experimented with a wealth tax in the 1990s but only three remain (Norway, Spain, and Switzerland)
What are your thoughts on Warren's Wealth Tax? Can such a tax work?
Tax Topic: Companies coming back to the U.S.
Why is it a Tax Story?
Back in 2017, President Trump passed the Tax Cuts and Jobs Act. The tax reform changed a lot and promised a lot, including a promise to bring companies and money back to the U.S. Trump and government officials based the promise on the implementation of a flat 21% corporate tax rate and a more competitive business environment. Now, in 2019, we are seeing inversions beginning to revert, which of course means money coming back to the U.S. Putting all our political biases aside, we should all be happy and excited about companies coming back to our country. The two companies of note include: Mylan and Allergan PLC.Tax Story Summary:
- Mylan
- a pharmaceutical company
- inverted and moved its corporate headquarters to the Netherlands in 2015
- announced its move back to the U.S. in a merger deal this week with Pfizer Inc.
- Allergan PLC
- a pharmaceutical company
- inverted to Ireland in 2015
- announced its return to the U.S. via a sale to AbbVie Inc.
- TCJA mostly eliminated the corporate inversion tax benefits
- the current inversion benefits prove so minimal that companies now believe costs outweigh the benefits
- Namely, the reputation and political costs from inverting to foreign countries
Do you see more and more companies coming back to the U.S. in the near future?
That is all for the most recent tax news, tax stories, and tax events.
Please share any and all comments below!
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