Пекин, 13 марта /ChinaPRO.ru/ – В 2017 г. оператор общественного транспорта в специальном административном районе Сянган (Гонконг) MTR Corporation получил прибыль в размере 10,51 млрд сянганских долларов ($1,35 млрд). С учетом инвестиций в недвижимое имущество данный показатель достигает 16,83 млрд сянганских долларов ($2,17 млрд). Это на 64% больше, чем в 2016 г.
Natural experiments in economics don't occur very often, at least not big ones of the sort that interest macroeconomists like me. But today we had not one but three big natural experiments. One is already concluded; the other two will play out over the next few months and years. Experiment #1. Does the powerful real estate lobby have enough political power to prevent Congress from taking away the mortgage interest deduction from the vast majority of taxpayers? Most people previously assumed the answer was yes. But today we found out the answer is no. Under the new tax bill very few taxpayers will deduct mortgage interest. Experiment #2. Does the mortgage interest deduction play a big role in supporting the price of residential real estate? I suspect the answer is no, but we'll know for sure within a few months. Experiment #3. Do state income tax rate differentials play a big role in interstate migration? I've argued that state income taxes play a bigger role than many progressives assume, but the effect seems to be declining over time as the younger generation cares more about non-material amenities, rather than material goods like a big house and an expensive car. I'll watch this one with great interest. Two things to look for: a. Is there migration from New York and Connecticut to Florida's Gold Coast, or from California to places like Las Vegas, Seattle and Austin? b. Do politicians in high tax states panic and cut the top rate, in order to hold on to the goose that lays the golden egg? Both will be fascinating to watch. Kansas was not a test of supply-side economics. This really is a test of supply-side economics. A few initial reactions: The good: 1. Smaller marriage penalty. 2. No corporate AMT, and far fewer affected by the personal income tax AMT (which now will be restricted to married couples with incomes over one million (singles over $500,000). That's not very many people. Of course it was stupid not just to eliminate it entirely, and make up the revenue with a tiny boost in the top rate. 3. A limit of $10,000 on SALT deductions. Basically this means that high income people get no deduction for state income taxes, as their property tax will use up most if not all of the $10,000. A huge blow to blue states. (Wait, I'm in California now! Oh well . . . .) 4. Lower marginal tax rates for most people. My family's MTR will fall from 33% to 24%, although of course I'll lose some of that in the limit on SALT deductions. 5. Much higher standard deduction---perhaps the single best change. Far fewer people will itemize. 6. No more health insurance mandate. But I'd label this an incomplete because the GOP will then have to fix Obamacare, and we don't yet know how. 7. Death tax exemption was doubled to $22 million for families. At least my daughter won't have to worry about that one! 8. Corporate rate cut from 35% to 21% 9. Investments can be written off immediately, instead of the complicated and pointless depreciation schedule. 10. Some limits placed on (big) business interest deductibility. I don't know the details on this one yet. There are probably other good provisions that I don't know about yet---did the go after business lunches? (One of the most outrageous tax breaks) The bad: 1. Nothing done about health insurance deductibility, the single worst aspect of the tax code. Indeed health expenses are now slightly easier to deduct, but only in 2018. Why? This one is a massive disappointment. Perhaps doctors are more politically powerful than realtors? 2. The 529 education savings account program expanded to cover K-12. This is actually not that bad, but I don't like loopholes. 3. Carried interest loophole maintained? Not certain if I have this one right. 4. Small businesses can deduct interest on loans. Why do we tax equity-financed investments at higher rates than debt-financed investments? 5. Marriage penalty is smaller, but still there. Why? 6. Deductions for quasi-government bonds that finance private activities are maintained. 7. Tax cut will cause the budget deficit to expand sharply---we'll pay a price for this fiscal irresponsibility down the road. 8. Many of the good provisions expire after a few years. Neutral: 1. Child tax credit increased. I generally don't like loopholes, but this one is pretty simple to handle, and does provide some needed tax relief to lower income families. 2. Deduction for pass-through business. Don't know enough to comment. Could be justified as providing backdoor relief for taxes on investment income, but will rules to prevent wage income diversion add too much to complexity? I don't know. 3. Corporate territorial system. Don't know enough to comment, but we were an outlier with the previous system. I don't have much to say about the distributional impact, as I don't trust any of the estimates. Distributional effects are an order of magnitude less important than efficiency effects. Why didn't blue state Republicans object more to the SALT deduction limit? They were bought off with a reduction in the top rate from 43.4% to 40.8% (wrongly reported by the media as 39.6% to 37%) It seems like blue state Republicans care more about affluent Republicans than they do about the states they live in. After all, the cut in the top rate won't in any way discourage people from moving out of New York and California, rather it will simply prevent wealthy taxpayers from being noticeably worse off. In other words, individual Orange County professionals (my neighbors) will be fine. The state government of California may not be fine. (23 COMMENTS)
Let's go back a couple years to see just how radically this country has changed. Jeb Bush is running for president, proposing a tax reform with a top marginal tax rate (MTR) of 28%. Marco Rubio is proposing a top rate of 35%, and that's viewed as being pretty mean to the rich: A revised 15%/35% structure would likely leave everyone unhappy: Those who are currently taxed at the top rate of 39.6% (taxable income in excess of $413,200 if single, 464,850 if married jointly) will not be thrilled at their rate dropping a mere 4.6%, particularly when previous plans by Bowles-Simpson and Romney had proposed a top rate ranging from 25-28%. So even the bipartisan Bowles-Simpson budget reform plan called for a much lower top rate. The eventual GOP nominee (Trump) called for a top rate of 25%, far below the 43.4% top rate enacted by President Obama. After winning all the branches of government, you'd sort of expect the GOP to propose at least a token reduction in the top rate. Now the Wall Street Journal reports that the GOP plans to raise the top federal income tax rate to 49.4%: The House GOP's reform proposal for individual taxes is a mess, but now we learn it also includes a stealthy 45.6% marginal tax rate on some high earners. This dishonest surcharge betrays the GOP's purposes of growing the economy and simplifying the code, and Republicans ought to kill this gift to the left that will be slapped on more Americans when Democrats return to power. [I added the additional 3.8% income tax to the regular income tax, something our media always forgets to do.] Now let's consider a wealthy person in California. Under Obama that person faced a top rate of roughly 50%, combining state and federal incomes taxes. Under the new GOP plan, the top rate for Californians would soar to 62.7%, a rate one associates more with Thomas Piketty or Bernie Sanders, rather than the Ronald Reagan GOP. (The UK has a top rate of 45%, for instance.) Pinch me, is this really happening? One of my commenters, who likes the proposed tax bill, specifically approved of the fact that it slashes taxes for businesses while raising them on high wage earners, which he suggested were largely "parasites". I think it's a silly to argue that business owners are somehow better than high wage earners, but let's say that this view is out there in America. One thing that some commentators noticed about the past election was that lots of working class people identified more closely with populist billionaires than with highly educated professionals (who they regarded as snobs). Now the GOP is producing a tax plan that slashes the MTR for working class people and also for billionaires like Trump, while raising rates on very highly paid professionals. Coincidence? We've had a lot of discussion of the fact that both the rich and the poor increasingly vote against their interests. Maybe not their actual interests, but against what intellectuals regard as their interests. One famous example is the book "What's the Matter with Kansas?". You could ask the same about the Upper East Side of Manhattan. Consider this possibility. If people in California and New York keep voting Democratic, even though many would benefit from lower taxes on the rich, then eventually the GOP starts to write them off, and no longer legislates in ways that favor those groups. I wonder if this is starting to happen already. In politics, things never stand still. When I was young, West Virginia was extremely Democratic and California was Republican. Given how these two states now vote, the GOP increasingly wants to "deregulate" industries like coal and "regulate" industries like high tech. The policies follow the voters, not the other way around. What about the flip side of this? Will the Dems move in the other direction? I'm not sure, but it's clear that if they don't then highly paid professionals and tech firms are going to start getting hit from both directions, and their situation is likely to become much less pleasant. In other words, maybe we are about to have two socialist parties, one leaning liberal and the other nationalistic. PS. An article in Forbes denied the existence of this top rate increase. But after reading all five pages, all the author did is convince me that he doesn't understand the distinction between marginal and average tax rates. PPS. This Tyler Cowen post on taxes is excellent. (14 COMMENTS)
New operator will replace old rolling stock on suburban services after August
MTR will run one of the UK's biggest franchises, along with majority stakeholder First Group.