President Trump Unveils Plan for Sweeping Tax-Cuts for Corporations
On April 26, President Trump unveiled the blue prints to his plan for an overhaul of the tax code, including a proposal to lower the corporate tax rate to 15 percent. The current U.S. corporate tax rate is 35%, the highest among developed economies. Many smaller businesses don’t pay the corporate rate but funnel their income through the individual tax code. The President’s plan would allow millions of these small businesses, known as “pass-throughs” or “S corporations,” to use the 15 percent rate as well. These businesses are often small, family-owned firms, but they can also be large partnerships, such as hedge funds or law firms.
White House officials claim the proposed 15% tax rate won’t be a loophole for rich people who should be paying higher rates; however, they offered no details as to how they would insure against this.
Trump also proposed a one-time tax “holiday” to encourage companies to bring several trillions of dollars held in other countries back into the United States. This process, called “repatriation,” is controversial. Critics allege that money is brought back and then paid out in dividends to shareholders instead of being used for hiring and investing.
In addition to changes to how businesses are taxed, Trump’s proposal would also impact individual taxpayers. The plan calls for the replacement of the current seven bracket system with three new income tax brackets of 10 percent, 25 percent, and 35 percent based on a person’s income. The proposal also roughly doubles the standard deduction and calls for the abolishment of the alternative-minimum tax and estate tax.
To offset the loss of revenue proposed by the cuts, Trumps plan will virtually eliminate all tax deductions that Americans now claim except those for mortgage interest, retirement savings, and charitable giving. Also eliminated would be the tax deduction Americans now claim for the state and local taxes they pay each calendar year.
The goal, according to White House officials, is to cut taxes so much and so fast that it will lead to immediate economic growth, creating more jobs and producing trillions of dollars in new revenue and wealth over the next decade.
Democrats and many budget analysts are skeptical that Trump can slash taxes without causing budget deficits to soar.
Labatt to Open Flagship Brewery and Restaurant in Buffalo
Labatt USA recently announced it will open a flagship restaurant and small test brewery called the “John Labatt House” in Buffalo’s Cobblestone District as part of a project by Pegula Sports and Entertainment to redevelop a five-story warehouse on Perry Street near KeyBank Center.
Details of the plan are still in development, but Labatt will be the main tenant in the redevelopment of the Hi-Temp Fabrication building at 79 Perry Street into retail, commercial, and residential space. Labatt, which employs 56 people locally, also plans to relocate its headquarters from Fountain Plaza to the building’s second floor.
The first floor of the building will contain Labatt’s new brewery and restaurant, which, according to Labatt USA executives, will be used as a pilot project to develop and test new products before bringing them to market. The restaurant and brewery will be the first of their kind for Labatt in the United States.
Both Labatt and Pegula executives cited the two companies’ long relationship as instrumental in developing the project. Labatt has partnered with the Sabres for 30 years and the Bills for 25 years and has also worked with Buffalo-based Try-It Distributing for over 70 years.
The first phase of the Hi –Temp building’s redevelopment is expected to be completed by fall 2018, with the office space coming before the restaurant. Located at the corner of Illinois and Perry streets, the 79,030-square-foot building was constructed in 1914 as a manufacturing plant for Peerless Mill Supply Co.
The proposal to turn the building into a restaurant, commercial and residential space is the latest in a string of new developments in the Cobblestone District, including updates at the Seneca Buffalo Creek Casino and the redevelopment of the Fairmont Creamery Building on Scott Street. Mayor Byron W. Brown said he has tallied more than $635 million in development in the district since 2012.
Ridesharing is Coming to Upstate New York
Ride-hailing services will be coming to upstate New York this summer under a state budget agreement passed in April.
After being unable to reach a deal last year to allow companies like Uber and Lyft to operate outside New York City, Governor Andrew Cuomo and lawmakers were able to find a compromise this year.
The agreement creates a statewide system called the Transportation Network Companies’ (TNC) operational license, to regulate the industry, giving oversight to the state Department of Motor Vehicles.
TNC companies will need to have insurance coverage levels of at least $1.25 million while a TNC driver is traveling to pick up a passenger and until the drop-off is completed. The state will also establish standards to ensure passenger safety, including mandatory background checks, ongoing monitoring for traffic safety, anti-discrimination protections, and zero-tolerance drug and alcohol policies.
Rides are also expected to include a 4 percent sales tax, and counties and large upstate cities may opt out of the law.
The state will also create a board to review the law as it is implemented. The law is expected to take effect in 90 days.
Prepared by Andrew D. Fiske