Latest news with #taxlaw
Bloomberg
8 hours ago
- Business
- Bloomberg
Casinos Push Congress to Undo Gambling Provision in Trump Tax Law
The gaming industry's push to reverse a provision in President Donald Trump's tax law requiring gamblers to pay taxes on some of their losses is gaining bipartisan momentum in Congress. The effort could have wider implications for the president's second-term legislative achievement, which squeaked through the House and Senate this summer as Trump personally lobbied fractious Republicans to set aside misgivings on everything from Medicaid cuts to the overall cost of the bill.
Washington Post
a day ago
- Business
- Washington Post
Newborn savings accounts a ‘back door for privatizing Social Security,' Bessent says
The newborn savings accounts created as part of President Donald Trump's massive new tax and immigration law are a 'back door for privatizing Social Security,' Treasury Secretary Scott Bessent said Wednesday. The so-called 'Trump accounts' enacted as part of the 'One Big Beautiful Bill' give newborns a $1,000 savings account that can be invested with tax deferred treatment. Families or their employers can make $5,000 contributions to the accounts each year until the beneficiary turns 18 years old.
Yahoo
3 days ago
- Business
- Yahoo
Morgan Stanley names tech stock winner from One Big Beautiful Bill Act
Morgan Stanley names tech stock winner from One Big Beautiful Bill Act originally appeared on TheStreet. Morgan Stanley has a brand new take on President Donald Trump's sweeping new tax law, and its impact on Big Tech could be huge. With President Trump's One Big Beautiful Bill Act, tech stock investors are hunting for the best names to cash in on early. 💵💰💰💵 In this regard, Morgan Stanley sees healthy upside for Amazon () , Google () , and Meta Platforms () . But in a fresh note, it has singled out one company as a clear winner, backed by its unique exposure to AI, data centers, and long-term R&D. It's not just about tax savings, but more about how that extra cash fuels the next leg of AI dominance. One Big Beautiful Bill Act reshapes Big Tech's tax playbook Since President Trump signed his massive tax bill, the regulatory landscape for Big Tech has shifted dramatically. Front and center is that the law allows 100% immediate expensing for qualified production property. In plain language, it allows businesses to fully deduct spending on data centers, chip fabrication plants, and AI hardware in the year of that's a huge shot of free cash flow, spurring a rush to accelerate AI infrastructure builds. The impact was immediate. Amazon, Microsoft, Google, and Meta have all looked to lock in write-downs and scale cloud capacity in the apparent gold rush. The bill also sweetens the R&D tax credit, while boosting the semiconductor production credit to 35%, incentivizing domestic chipmaking. On top of that, executive orders linked to the bill waive off environmental reviews under NEPA and the Clean Water Act for data center construction. That adds another rudder or two for tech giants looking for quicker AI infrastructure development. Nevertheless, the upshot comes at a steep price. The Congressional Budget Office estimates the bill could slash $4.46 trillion in tax revenue over a decade and add over $3 trillion to the national debt. Not to mention, it could also add new scrutiny on cross-border IP transfers, cooling global tech deals. That said, with the earnings season heating up, experts say the bill's effects will start showing up in lower tax burdens, higher capex, and a new era of AI domination. AI regulation freeze hands Big Tech a powerful edge Tucked inside President Trump's massive tax law is a bold move. That's a massive 10-year federal moratorium on any state-level AI regulations. It effectively wipes out a patchwork of local laws, replacing them with a uniform federal of Science and Technology Policy (OSTP) Director Michael Kratsios feels the shift is critical in pushing the U.S. ahead in the AI race against China. A uniform rulebook will accelerate nationwide deployment while protecting companies like Google and Microsoft from policy-related headwinds. Nonetheless, the critics aren't sold. Rep. Ro Khanna (D-Calif.) and more than 250 state lawmakers warn that the moratorium effectively takes away consumer protections, while concentrating power in Silicon Valley. Also, China's Premier Li Qiang has called for global AI governance, which goes against the U.S. go-fast model. Consequently, the Senate struck the moratorium at the start of the month, meaning states still have the authority to enforce their respective AI laws. Still, experts say the White House's July 24 'AI Action Plan' essentially revives the moratorium's spirit. Layering the federal AI development funding on top of state‑level regulatory leniency opens the door for effectively pressuring non‑compliant states to pull back or risk losing grants. More News: Top economist drops 6-word verdict on Trump tariffs, inflation Amazon's quiet pricing twist on tariffs stuns shoppers Nvidia avoids White House crackdown; Trump softens on AI giant So in essence, we're seeing the administration using funding carrots and sticks to keep the regulatory playing field intact. Morgan Stanley sees Amazon as biggest winner from One Big Beautiful Bill Act The massive tax law marks a major turning point for Big Tech, and Morgan Stanley is calling out a clear winner. In a new research note, analyst Brian Nowak says that President Trump's tax law will dramatically improve the free cash flow outlook for giants such as Amazon, Meta, and Google. However, he feels that Amazon in particular is positioned to benefit the most. Though Google and Meta will likely see meaningful FCF gains, up 5% and 22% by 2026, respectively, Amazon could unlock a humongous 30% jump, led by data center, logistics, and a burgeoning cloud footprint. Amazon: a tax-fueled AI power play Morgan Stanley's Brian Nowak predicts that Amazon could make $15 billion in incremental FCF between 2025 and 2027, plus another $11 billion in 2028. That cash won't sit idle, though. Rather than returning it all to investors, Nowak expects Amazon to reinvest heavily into its cloud behemoth, AWS, and retail innovation. The goal is therefore to continue boosting its lead in generative AI, automation, and infrastructure. Even reinvesting 50% of that cash could drive billions in savings and compound Amazon's cloud advantage and in its consumer delivery. Nowak has a Buy rating on Amazon and a lofty $300 price target, which implies close to a 30% Stanley names tech stock winner from One Big Beautiful Bill Act first appeared on TheStreet on Jul 28, 2025 This story was originally reported by TheStreet on Jul 28, 2025, where it first appeared.
Yahoo
6 days ago
- Business
- Yahoo
They're rich. They're anti-Trump. And they don't want their big tax cut.
Kimberly Hoover has been to most Michelin-star restaurants on the East and West coasts. She and her wife, multimillionaires from their real estate firms, own homes in or near New York City, Washington, Miami and Quebec. Their lives are filled with skiing, fine wine and long trips to Europe. Hoover's accountant estimates that the new tax law that President Donald Trump signed this month will save her several million dollars over the next few years. While many Americans might rejoice at that kind of windfall, Hoover worked hard to stop it from becoming a reality, arguing to lawmakers that she has more money than she needs. Subscribe to The Post Most newsletter for the most important and interesting stories from The Washington Post. 'At some point, it starts to feel wrong. It starts to feel excessive. It starts to feel somehow inappropriate. And at some point, it just doesn't feel good,' said Hoover, who spoke while on break from a sapphic literature conference she helps sponsor in Albany. 'Imbalanced is really not good for anyone, even if you're on the positive end of that imbalance, because it's unsustainable.' Hoover's experience reflects an unusual irony of Trump's signature tax legislation: Many of its biggest beneficiaries fiercely oppose the president - and even oppose policies he is pushing that will make them richer. The mismatch is partly a result of a crucial, if ongoing, evolution of the role class plays in American politics. During the administrations of Ronald Reagan, George H.W. Bush, and George W. Bush, affluent Americans who benefited from tax cuts were more likely to be Republicans. The political party they supported delivered material benefits that boosted their pocketbooks. Democratic voters, by comparison, were more likely to be working or middle class. Now, more than half of upper-income families - defined as those earning more than $215,400 per year - vote Democratic, according to a 2024 Pew Research survey, as more highly educated voters shift to the left. The top fifth of earners went from supporting Barack Obama in 2008 by a 2.5-point margin to supporting Joe Biden in 2020 by close to 15 percentage points. 'Affluent Americans used to vote for Republican politicians. Now they vote for Democrats,' one 2023 paper found. That shift intensified during the 2024 presidential election, when large numbers of Black and Latino voters, who tend to be lower-income, defected to the Republican ticket for the first time in decades, according to several political scientists, exit polls and studies. 'There's been a lot of talk about how even though the Republican coalition has changed and gotten more working class, their policies have not,' said Matt Grossmann, a political scientist at Michigan State University. 'But there's been less attention to a similar but true fact on the other side - a lot of Democratic politicians were elected by very rich constituents who are more likely to benefit from Republican tax policy than Democratic policy.' As a result, many of the provisions of the GOP tax law will benefit a voting bloc that is increasingly Democratic. The $3.4 trillion legislation extends a lower tax rate for the top tax bracket, rejecting the president's suggestion of a new tax on million-dollar earners. It expands and makes permanent a smaller federal estate tax, allowing up to $15 million to be passed on tax-free ($30 million for couples). It also makes permanent a large deduction for businesses formed as pass-through entities, while raising the cap on what filers can deduct in state and local taxes. (The GOP's 2017 tax law also permanently lowered the corporate tax rate from 35 percent to 21 percent.) When all these provisions are combined, Trump's second tax bill devotes roughly $1 trillion in tax cuts for those earning more than $400,000 per year - roughly the size of the law's cuts to Medicaid, the federal health insurance program for the poor. (Most of the bill's cost, though, comes from provisions that largely benefit middle-class households, such as a larger child tax credit and standard deduction.) Steve Lockshin, a financial adviser and co-founder of the estate advisory platform Vanilla, represents clients with at least $50 million and whose fortunes are sometimes in the billions of dollars. A tax cut of about 2 percent for a middle-class family translates into about $1,800 per year, according to the Tax Policy Center, a nonpartisan think tank. But for Lockshin's clients, saving several percentage points in taxes can mean hundreds of thousands of dollars, if not millions, per year. One provision that has become particularly beneficial to his clients is the law's expansion of 'Opportunity Zones,' which allow investors to defer capital gains taxes by reinvesting profits into designated economically distressed areas. The program allows wealthy individuals to delay or, in some cases, permanently avoid paying taxes on capital gains if they make investments in specified zones. 'The general mentality is the same across the board with my clients: 'I want to pay the least I can. I also want the best for my country, and I would invert the two if it had a meaningful impact,'' Lockshin said. 'And if you are wealthy - but aren't pro-Trump and just along for the ride - most of my network is thinking, 'While Rome is burning, at least I'll save a few dollars in taxes.'' Opposition to tax cuts has surfaced in many wealthy liberal enclaves. At the Harvard Club in New York City, 'everyone under 50 feels this way,' said Bob Elliott, chief executive of Unlimited, an investment firm. 'The classic question is how much do you worry about it benefiting yourself versus the societal consequences - that's the trade-off,' Elliott said. 'Many of the people who don't like the bill are saying, 'Really, even if I get money, it's still at the expense of taking people off Medicaid.'' Nonpartisan estimates have found that the GOP tax law will lead to more than 13 million fewer Americans having health insurance. Some experts say rich people have self-interested reasons to oppose the tax cuts that go beyond the broader social consequences. Many of the law's short-term benefits come with long-term drawbacks, said Constance Hunter, chief economist at the Economist Intelligence Unit, a research firm. That, she said, is because many people at least intuitively understand the concept of 'Ricardian equivalence' - the idea that deficits will need to be paid for eventually through higher taxes, so consumers adjust their behavior accordingly by saving more in preparation. 'I think there are a number of people, some of whom are affluent and that span the political spectrum, who realize we cannot keep expanding our deficits indefinitely, especially at a time when our economy is showing resilience and growing,' Hunter said. 'A lot of wealth is held by business owners, and while certain provisions may be providing tax cuts now, these are likely to be accompanied by greater financing costs for business owners,' as reflected in the higher interest rates needed to combat increases in inflation. Drew E. Pomerance, a Los Angeles lawyer in business and commercial litigation, said that his net worth is in the tens of millions of dollars and that he will probably save tens of thousands of dollars from the law every year. While he said 'it never ceases to amaze me that people vote against their own economic self-interest,' he also said he will benefit from the bill but thinks 'it's terrible for America.' 'Don't get me wrong: I like money. I like having money. I'm not opposed to having money,' he said. 'But at the expense of what it does to the rest of the country, it should not be a priority to give me and other rich people more money.' The willingness of some liberals to vote against their economic self-interest should give them pause before they accuse conservatives of doing the same, said Michael Strain, an economist at the American Enterprise Institute, a right-leaning think tank. He said Republican voters in lower-income states are often unfairly maligned this way, pointing to the 2004 book 'What's the Matter With Kansas?' 'Nothing is the matter with Kansas. The people of Kansas vote for a variety of reasons, one of which is economic self-interest,' Strain said. Some multimillionaires, such as Morris Pearl, who served as managing director at the investment firm BlackRock, say they are getting money from the tax cut they do not need. (Pearl, like Hoover and Pomerance, is part of Patriotic Millionaires, a group of rich Americans devoted to trying to raise taxes on the rich.) Pearl's mother-in-law died last year, and he and his wife benefited from the 2017 changes to the estate tax. He has taken advantage of the low-tax Opportunity Zone rules, though he does not remember where or how much he has invested. He will probably continue to do so now that they have been extended. 'It's great for me personally, financially,' Pearl said. 'But even looking at my own and my family's long-term self-interest, I would prefer less inequality and less of a country of very rich and very poor, and more of a country with lots of people doing all right.' In August, Pearl is traveling to a fundraiser for Democratic lawmakers in California. Every year, he donates hundreds of thousands of dollars to Democratic politicians, which he described as the first thing he would cut back on if his fortune started to shrink. Thanks in part to the GOP tax law, Pearl added, that is not going to happen any time soon. Related Content Hulk Hogan was a well-known Trump supporter. Their ties go back 40 years. Mendelson reaches deal with Commanders on RFK site amid growing pressure Amy Sherald cancels major Smithsonian show over 'censorship'
Yahoo
24-07-2025
- Business
- Yahoo
Trump Denies Wanting to Destroy Elon Musk's Firms
(Bloomberg) — Donald Trump denied he was seeking to ruin the business empire of his onetime ally Elon Musk as retribution for their dispute over the US president's signature tax law. Trump Awards $1.26 Billion Contract to Build Biggest Immigrant Detention Center in US Why the Federal Reserve's Building Renovation Costs $2.5 Billion The High Costs of Trump's 'Big Beautiful' New Car Loan Deduction Salt Lake City Turns Winter Olympic Bid Into Statewide Bond Boom 'Everyone is stating that I will destroy Elon's companies by taking away some, if not all, of the large scale subsidies he receives from the U.S. Government. This is not so! I want Elon, and all businesses within our Country, to THRIVE,' Trump posted Thursday on social media, though it was unclear exactly what comments he was responding to. 'The better they do, the better the USA does, and that's good for all of us. We are setting records every day, and I want to keep it that way!' the president added. Tesla's (TSLA) shares pared a drop of as much as 9.5% after Trump's post to trade down 7.8% as of 10:03 a.m. in New York. The stock had declined 18% this year through Wednesday's close, even after recovering from deeper lows in March and April. The comments mark the latest twist in the tumultuous relationship between two of the world's most powerful figures, after a falling out that has led Musk to unleash a barrage of attacks on Trump and float the creation of a new political party. The US president in response threatened to terminate Musk's government contracts and subsidies. Both men subsequently moved to make amends, but the damage was done to Musk's business interests. In a quarterly earnings statement Wednesday, Musk's Tesla Inc. cited the loss of electric vehicle subsidies and increased tariffs — both Trump policies — as two headwinds for its car-making and energy businesses. Musk on Wednesday warned of difficult times ahead for the electric carmaker, saying it would be in transition for the next year or more after losing EV incentives in the US and needing time to roll out autonomous vehicle. 'We probably could have a few rough quarters,' Musk said. Musk in May left his government post, in which he oversaw the Trump's government cost-cutting initiative to return to his companies, which have many links to the US government. SpaceX ( is a key government contractor with both the National Aeronautics and Space Administration and the US military. Tesla, which accounts for the bulk of Musk's wealth, for years has benefited from a $7,500 tax credit for EV purchasers, as well as the sale of regulatory credits that rival carmakers purchase to comply with federal tailpipe emissions and fuel economy standards. During their dispute, Musk threatened to decommission SpaceX's Dragon spacecraft, a vital capsule that NASA uses to send astronauts and supplies to the International Space Station. Musk later walked back the threat and SpaceX continues to launch Dragon vehicles. —With assistance from Loren Grush, Gregory Korte and Ryan Beene. Burning Man Is Burning Through Cash Elon Musk's Empire Is Creaking Under the Strain of Elon Musk It's Not Just Tokyo and Kyoto: Tourists Descend on Rural Japan A Rebel Army Is Building a Rare-Earth Empire on China's Border What the Tough Job Market for New College Grads Says About the Economy ©2025 Bloomberg L.P. Sign up for Yahoo Finance Daily Movers By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
