Tax reform bill lands shortly after the morning newspaper

This is one of the problems with running a daily newspaper in the Internet age. The Las Vegas paper — which hit the driveways this morning — has a story about what is expected to be in the Republican tax reform bill, but an hour or so later the actual tax bill has been released.

The New York Times is reporting that the much debated and maligned dropping of the income tax deduction for state and local income and sales taxes is still in the bill.

The state and local tax (SALT) deductions are patently unfair to states with lower tax rates.

Using 2010 statistical data from the IRS, you find Californians who filed for state and local income tax deductions claimed deductions of $10,700 per return. Nevadans who filed for the state and local sales tax deduction claimed only $1,430 per return.

Calculated on a per capita basis, Californians claimed $2,116 in federal income tax deductions, while Nevadans claimed only $166 per person for sales tax deductions.

The tax deduction for property taxes remains but is capped at $10,000. The bill also maintains mortgage interest deductions for existing mortgages, but caps the deduction for newly purchased homes to $500,000.

The bill also establishes three tax brackets — 12, 25 and 35 percent. “Single filers making up to $24,000 will pay no income tax; up to $90,000 will be in the 12 percent bracket, up to $260,000 in the 25 percent bracket and up to $1 million in the 35 percent bracket. Those making above $1 million will be in the 39.6 percent bracket, which is currently the top rate for millionaires,” the Times says.

The standard deduction for the 70 percent of Americans who do not itemize would increase from $6,350 for individuals to $12,000 and from $12,700 to $22,000 for married couples.

There will be no changes to 401(K) plan tax exemptions after all.

It also doubles the exemption for the estate tax and repeals it after six years.

Bloomberg is also reporting that the bill ends the $7,500 credit for purchasers of electric vehicles made by companies such as Tesla Motors, which got more than $1 billion in tax breaks from Nevada to build a battery plant in Sparks.

Now the fight begins. Nevada Democrats have largely opposed the tax reforms that would benefit most Nevada taxpayers and stimulate the economy.

 

Future of Faraday Future’s Nevada manufacturing plant looking bleak

Faraday Future pro type

Faraday Future pro type

“No company has had such an experience, a simultaneous time in ice and fire. We blindly sped ahead, and our cash demand ballooned. We got over-extended in our global strategy. At the same time, our capital and resources were in fact limited.”

— Jia Yueting, head of Faraday Future and other businesses, in memo obtained by Bloomberg News

Gullible Nevada lawmakers in a special session in 2015 on blind faith alone agreed to dole out $215 million in tax abatements and credits to entice Faraday Future to build an electric car factory at Apex in North Las Vegas, though at the time it did not even have a prototype vehicle. The prototype it has since unveiled appears to have only one seat.

The state also promised $120 million in infrastructure that includes water, rail and road improvements that may include widening I-15 and improving the freeway interchange near the Apex industrial park.

Bloomberg reports that Nevada Treasurer Dan Schwartz is still balking at issuing bonds needed to advance the project due to doubts about Jia’s ability to raise funds — doubts expressed by Jia himself — but Schwartz’s office wasn’t available for comment outside of normal business hours.

Bloomberg also said Jia’s memo “singled out the car division for its profligacy, saying it had already spent 10 billion yuan in early development.”

The LA Times reported two weeks ago that Faraday Future hasn’t been paying its bills and still owes on a $75 million performance bond to the state of Nevada.

The newspaper quoted Schwartz as saying, “My questions are all about how they finance this. … I’m afraid it will never be financed and implode in the middle.”

He noted, “The stock is worth [about] half of what he started with.”