WRKO>Audio & Video on Demand>>Patrick Foulis (The Economist, Tax Reform)

Patrick Foulis (The Economist, Tax Reform)

Nov 14, 2017|

Transcript - Not for consumer use. Robot overlords only. Will not be accurate.

A big thank you to Bertans grill in Burlington where we're broadcasting from today they serve amazing flavors in every bite. For every talent so he can book private dining room today and give Bertans gift cards to everyone as we head towards Christmas Eve Burton grilled dot com. For their eight New England locations once again we are broadcasting from their location in Burlington Massachusetts today. Right here on the financial exchange Patrick miles from the economist and joins us now on the line here to talk about. Businesses are looking at tax reform and Patrick thank you for coming on us. It Patrick can you talk about the reaction overall that we've seen from businesses. To some of the ideas that have been bandied about. For tax reform municipal. For the victory to quite playing I mean from politically the Republican popular vote on desperate that to try and all who. In minutes. You weeks in the world that it got a big legend but the accomplishment of the rebel movement and next year. I'm meanwhile in the business world expectation to be very sorry about that a is that friendly acts of war. Package and so more than normal in expectation but what. I want to be note that while we don't. Proposals in play patent and a lot of new state will be beat these businesses it EPO I think if what is preparing. Which is principally that the satellite tax rate rules. But wouldn't rule. He's about when pools papal by that would report from the option but the wind is the visas and it's extremely cold but they didn't you might expect which mean that some people. Or more on the principal concern of that I think investors and the company ministers that the election well. And let's talk about some of the the potential losers in this tax reform deal one of the most outspoken groups are really two of the most outspoken groups to this point. Have been home builders and real estate agents and that's largely due to the changes happening on the deductibility of mortgage interest as well as on property taxes and you know each week there's a ton of arguments for and against but in general. You know most people seem to say look you know we shouldn't be subsidizing these industries for no reason how what are these businesses trying to do to react. Well you visit the massive Moby. Brian. I've been yet on Horry in in the US and at that encompasses the bill would be mentioned but also vaults of banks and mortgage businesses but the reality is that mortgage interest subsidy it. Is paid out by their government and most of its option but very wealthy people say. There's really know of very strong law human do it it is it tends to benefit the rich and the subsidy. Of foreign money to prosecute it but not truly if you run into him building company you'll. A bank but over multiple reasons you do pretty differently book about the countries that. Needed a big Pebble Beach and about stability in and abolished but the thing that America let alone for Opel but he recently. Abolished it. Mortgage interest about that in the world that well well well. What about the the changes that are potentially happening to small businesses one of the proposed changes in the house bill. Is to cap the rate that pass through businesses such as partnerships and LCs would end up paying. At 25%. But it also includes error rather it excludes a number of types of businesses. From being able to be capped there. Yes and and you don't doubt that the complex these these these things that I rule will employ it's the negotiations in the patents and there'll. Mean us sort Treasury Secretary and action. Speaker again have mostly been in U community he was passionate about the reforms being is going to help small businesses but at some point and it's. The rumble evolve adoption that will be removed it won't try it raise revenues. If you look at that particular thing you're talking about the posterior again it's one of these things where where you used audible small businesses. That the corporate structure. Most of the benefit of Russian corruption court very wealthy people instruction. This is the eaten thing. Was a moment pops. Pop store will take the policies actually controversial. Because animals have the benefit of that the belt of the tax reduction in the parties who will be much. Like the rich. What are the other questions that I have with regards this Patrick is. Tax reform has been pitched as an incentive or as a way to simplify the tax system we've all seen the idea that we can simply file a postcard. And get our tax reform done if you start getting into things where hey if you're in one industry you can take this break if you're in another you can't. Doesn't that just add more complexity of the situation actually. Yes I the media and it'd be unfortunate thing about what tax reform number around the world and you spoke with something which is the belly pulpit and equipment at the end of the political. Negotiation it a little more complicated. I would say that I have a unit that that the corporate. And one strong element of them is removing. The president. The US house of trying to topics companies lately the unit that be something in China life. The American. Is there's been what Katrina but has introduced in the almost complex. He is the system that does what the nature club uses a body that the way not like you think the system the businesses will be affordable. What are the other things that we see as a result of the way our corporate tax structures currently set up. Is that a lot of companies that do business in the US might not actually pay that headline 35% rate in some cases they may pay next to nothing. The way that the current structure is set up so. Are any of those companies that right now having low effective rate in the US coming out against tax reform because they wanna keep you know there's there's 0% greater something like that. What yet to be it music picked you because US is the egg roll and just pick me cooperate. That'd be back equipment. They actually they the government. Roughly. About twenty point and to that it America American company. Played about like deployed but they all early Mondays and the dude it's avoiding paying deployed at blowing. That's right it really be expected. The US sneak peek at it from about twenty only the sent to rent. 20% now all the Steven Ross some companies the book went Silicon Valley paid much let it actually you know up straight as between 1520%. That relates to its foreign business. If that these I'm not so in wet. The rules being changed and to try and avoid the Oakland the it's cool to figure out what level of the bowl. So I think you're right the resist spread of company and he. Fire lit expert but we've lament to know what is actually say that that line that he bought the parting thoughts were that the B. Actual content of that would you like they. Target Patrick thank you very much of the time today. But. That is Patrick fouls from the economist talk about tax reform.