Tax Bill Offers Last-Minute Breaks for Developers, Banks and Oil Industry
But the companies would still bring those earnings home at rates of 7.5 to 14.5 percent — well below the existing corporate income tax rate of 35 percent
and also lower than the new corporate income tax rate, which the bill would cut nearly in half to 20 percent.
The richest taxpayers will be taxed at a rate of about 29.6 percent on such income, a big cut from the current top federal income tax rate of 39.6.
Investments in mortgages held by real estate investment trusts would be able to take advantage of
the lower pass-through rate instead of being taxed at ordinary income rates, which are higher.
“I’m not sure if that is a loophole or the intent of the legislation.”
One of the bill’s biggest windfalls for the wealthy — cutting taxes on income received through so-called
pass-through entities like partnerships, popular with real estate developers — got even more generous.
The bill extends so-called bonus depreciation — the ability to take big deductions related to certain corporate investments — at a cost of $34 billion,
but pays for it by reinstating the corporate alternative minimum tax.
But the final version doesn’t apply to employers in states where such paid leave is either required
— or will soon be required — by state law, as in New York, California, New Jersey and Rhode Island.
Thanks to an amendment offered by Senator John Cornyn, Republican of Texas, certain income from gas
and oil operators could also qualify for the new, lower rate.