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September 26, 2023

Accounting News Roundup: “Small Business” and ‘You’re going to get killed in this bill’ | 11.09.17

accounting news tax reform pass through small business donald trump accountant

“Small business”

Politicians love to trumpet their support for small business. And it’s no wonder, small businesses are all around us, so groveling to them makes for an easy ploy. The Republican tax plan includes a 25-percent rate for pass-through entities, which many people equate with “small business.” Unfortunately, the vast majority of small businesses won’t be able to take advantage of that rate if it were to become law. Here’s an explanation from the Steven Rosenthal of the Tax Policy Center:

[M]illions of owners of businesses, both big and small, would not benefit from the new low rate because they don’t earn enough income. Nearly 90 percent of pass-through owners already pay a tax rate of 25 percent or less (under current law). Thus, the 25 percent income tax rate cap on pass-through income would not benefit them at all. By contrast, the ones who could benefit most from the 25 percent tax rate cap are those in the 39.6 percent bracket, who currently receive half of all pass-through income.

The only thing more nonsensical than a small business tax cut that won’t benefit small business is suggesting that you pay taxes when you die. Dead people don’t pay taxesHeirs pay taxes. You’d think that wealthy people obsessed with avoiding taxes — or maybe their idle offspring — would be rushing toward the grave.

Accountants (possibly) behaving badly

Elsewhere in stuff that doesn’t make sense, here’s giant blobfish and current President of the United States Donald Trump saying something:

“My accountant called me and said ‘you’re going to get killed in this bill,'” the president said during a phone call from his trip in South Korea. He was apparently trying to increase Democratic support by claiming the bill would hurt wealthy taxpayers like himself, making the point that only the repeal of the estate tax would provide him any benefit.

Okay, there seems to be a few possibilities here: 1) Donald Trump lied; his accountant didn’t call him and say “You’re going to get killed in this bill.” 2) Donald Trump’s accountant did call and said, “You’re going to get killed in this bill,” but was lying when he said it; 3) Donald Trump has a very, very bad accountant.

Although #1 seems most plausible, we can’t completely rule out #2. For #3, I’d like to give the accountant the benefit of the doubt, but we cannot eliminate the possibility that Donald Trump’s accountant doesn’t know what he’s doing. And, by the way, doesn’t the President of the United States have better things to do than talking to his accountant when he’s a stone’s throw from the DMZ? Can’t someone on the daycare team get this guy to focus? My newborn child has a longer attention span.

Previously, on Going Concern…

In Open Items, a user asks about the “working environment […] in the accounting industry in terms of emotional intelligence?” Another user wants to know about juggling two Big 4 internships.

In other news:

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