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Samantha Jacoby Profile picture
@jacsamoby
Dec 30, 2019 • 4 tweets • 2 min read • Read on X
Though it's not new or unique for companies to lobby agencies for favorable regulations, the scope & scale of the lobbying post-2017 tax law - & apparent success of that effort - is pretty striking.
nytimes.com/2019/12/30/bus…
We raised this flag as Treasury enacted regulations implementing the unprecedented 20% pass-through deduction.

The tax break was one of costliest (and most tilted to the wealthy) in the law, and the Treasury regulations likely made those issues worse.
cbpp.org/blog/pass-thro…
As @JesseDrucker and @jimtankersley point out in the article, #OZs are another example.

JCT's updated 2019 expenditure estimate approximately doubled vs. 2018 - and the investor-friendly regulations could increase the cost even more. Image
Another ex: practitioners have argued the GILTI high-tax exception would expand a subsidy for MNCs, w/little statutory basis. And by making it ELECTIVE, not mandatory, taxpayers can game the provision by choosing the outcome that saves them the most money.
dash.harvard.edu/bitstream/hand…

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More from @jacsamoby

Samantha Jacoby Profile picture
Jul 28, 2022
Adding a bit to @ChuckCBPP's thread, specifically on how the Inflation Reduction Act would narrow the longstanding carried interest loophole that lets private equity (and other investment fund) managers pay lower tax rates than their employees:
First, it's helpful to understand how private equity funds generally work. The fund is a partnership, which is a “pass-through” entity, so the fund’s profits are taxed in the hands of the owners as if the owners received the income directly.
The fund’s “general partner” is usually another partnership that is itself owned by the fund’s managers. The other owners, known as “limited partners,” are often institutional other passive investors who contribute capital to the fund.
Read 11 tweets
Samantha Jacoby Profile picture
Jul 14, 2022
🧵setting the record straight about a proposal to close the loophole that lets some pass-through business owners avoid both a 3.8% Medicare payroll tax AND a parallel 3.8% tax on net investment income.
Closing the loophole would (1) limit inefficient gaming, (2) only affect a small share of high-income owners (and would thus be highly progressive) and (3) treat all pass-through business owners equally & improve economic efficiency.
Here’s the issue: high-income people who should be subject to either the 3.8% NIIT or Medicare tax can relatively easily rearrange their income & ownership form to avoid both 3.8% taxes. Lots of good examples here from @jeanmarionross and @SethHanlon: americanprogress.org/article/fact-s…
Read 16 tweets
Samantha Jacoby Profile picture
Sep 28, 2020
Something any tax lawyer would tell you: many tax questions lack clear answers. In those fuzzy cases, taxpayers (aided by their tax advisors) have an incentive to place themselves on the tax-saving side of the line.
That’s tax avoidance. And often the only thing keeping high-income filers from taking more and more aggressive positions – eventually crossing the line into illegal tax evasion – is IRS enforcement (or the prospect of it).
But since 2010, policymakers have consistently slashed IRS enforcement funding, undermining the agency’s ability to perform its core function of enforcing the nation’s tax laws. With less enforcement funding, there’s far less auditing of the wealthy. ImageImage
Read 13 tweets
Samantha Jacoby Profile picture
Aug 12, 2020
Important point from @crampell: in addition to leaving out struggling low- and middle-income families, a new capital gains tax cut would heap yet another tax break on investments that are already barely taxed washingtonpost.com/opinions/whate…
-Capital gains taxes are lower than top rates on wages (20% vs. 37%)
-Investors can avoid tax until they sell
-Other loopholes (like-kind exchanges, OZs, etc.) give tax breaks even if they sell
-Income tax is forgiven if they pass on assets to heirs
cbpp.org/blog/much-of-w…
Wealthy investors clearly don't need another tax break. Instead, policymakers should focus efforts on quickly getting $ into the hands of people who will spend it - lower-income families - to boost demand and provide relief.
Read 4 tweets
Samantha Jacoby Profile picture
Aug 11, 2020
Thread: 30 million people are unemployed, 8-15 million kids aren't getting enough to eat & President Trump has - twice in 2 days - said he wants a capital gains tax cut. Regardless of the details, this would be a windfall for the wealthy. Here’s why 👇
It would do little or nothing to help “middle-income” people, let alone those who lost jobs or are struggling just to get by.
Capital gains cuts largely benefit wealthy investors: the top 1% got 75% of all long-term capital gains in 2019 & the top 20% got more than 90%, according to the Tax Policy Center.
Read 10 tweets
Samantha Jacoby Profile picture
Aug 7, 2020
The Trump Administration is considering an executive order imposing a "payroll tax holiday.” The President has repeatedly called for a payroll tax cut in the upcoming stimulus package, but Senate Republicans rejected that for their proposal. 1/
bloomberg.com/news/articles/…
The two main payroll taxes amount to 15.3% of the first $137,700 of earnings, w/7.65% paid by employees (withheld from paychecks) & 7.65% paid by the employer. The CARES Act already deferred most employer-side payroll taxes through 2021. 2/
Experts say the President likely lacks authority to enact a payroll tax holiday: the President can defer taxes for up to a year during national disasters, but can’t forgive taxes or eliminate employers’ legal obligation to withhold tax from paychecks. 3/
Read 9 tweets

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