Tax plan winners
THE TRUMP ORGANIZATION:
At least temporarily, companies with profits that double as the owner’s personal income would enjoy a substantial tax break. Consider the Trump Organization. It consists of about 500 such “passthrough” entities, according to the president’s lawyers. Rather than pay the top rate of nearly 40 percent, Trump likely would be taxed on these profits at closer to 30 percent. The final bill also appears to specifically benefit the real estate sector, the bedrock of the Trump family’s wealth, with benefits for depreciating the value of property held by pass-through companies. The president’s family didn’t receive every possible benefit. The estate tax on inheritances, for example, will stay in place, though it will apply only to the portion of a family’s estate that exceeds $11 million — twice the previous level — at least through 2025. And the alternative minimum tax, which is intended to prevent the wealthy from exploiting loopholes to avoid taxes, would stay in place as well, though its higher thresholds also would be temporary.
ENERGY DRILLERS:
It’s no longer off limits to drill in Alaska’s Arctic National Wildlife Refuge for oil and natural gas. President Barack Obama had sought to protect the 19.6-million acres, a home for polar bears, caribou, migratory birds and other wildlife. But under the Republicans’ tax plan, fossil fuel companies could tap into oil and gas reserves. Alaska U.S. Sen. Lisa Murkowski and other Republicans insist that drilling can be done safely with new technology while ensuring a steady energy supply for West Coast refineries.
SPORTS TEAMS:
Major sports teams will still be able to build and renovate their stadiums with taxexempt municipal bonds. The House version of the tax bill had initially scrapped access to this form of debt by sports teams, a provision that drew objections from the NFL. But the final bill retains it. Such tax-advantaged public financing should make it easier to have the Oakland Raiders, for example, move to Las Vegas and play in a new $1.9 billion dome. Forbes estimates the Raiders, owned by Mark Davis, to be worth $2.4 billion.
MAJOR CORPORATIONS:
The tax rate for most companies would drop to 21 percent from 35 percent. This is a permanent rate cut, which, along with a shift to a lower rate on some foreign earnings, could help boost corporate profits. Not surprisingly, the stock market has soared in part over anticipation of these lower corporate taxes. The Standard & Poor’s 500 stock index has jumped nearly 24 percent since Trump’s election last year.
TAX LAWYERS:
Rather than close loopholes, the tax bill appears to create more of them. Tax lawyers and accountants likely will be besieged by clients looking for professional guidance in restructuring companies and incomes to avoid taxes. In fact, tax experts and lawyers who reviewed a prior version of the tax bill outlined a slew of loopholes in a 35-page report in which it warned that the bill would “allow new tax games and planning opportunities for well-advised taxpayers.”