Here are the legal stories of my radar today.
A downgrade: The Washington Post reports that a key Obamacare surcharge on investments may not be as profitable as originally projected by Congress’ Joint Committee on Taxation.
The tax was a 3.8 percent fee on certain kinds of investment gains for taxpayers that have more than $200,000 in annual income (or couples over $250,000).
Two theories for the drop in revenue:
- Wealthy individuals are avoiding the surcharge on investments by housing investments in S corporations and then paying themselves as employees.
- The Joint Committee has simply taken a more pessimistic view of the profitability on the investments subject to the surcharge.
The new, lower estimate is that repealing this part of Obamacare will cost the government $158 billion in revenue over the next 10 years. (Washington Post)
Corporate taxes: The Congressional Budget Office has a look at U.S. corporate tax rates compared to the rest of the world.
The gist? U.S. tax are relatively high:
“In 2012, the United States’ top statutory corporate income tax rate of 39.1 percent was second only to that of the United Arab Emirates, according to a survey of 129 jurisdictions by KPMG International.
The U.S. rate was 10 percentage points higher than the average rate (weighted by GDP) for the rest of the G20 countries.
The U.S. rate exceeded the 32 percent that was the average of top tax rates among all of the 15 countries with GDP above $1 trillion. After the United States, Japan had the next-highest rate of that group at 37 percent, and Russia had the lowest rate, at 20 percent.”
However, this only paints a partial picture – very few (if any) large U.S. companies actually pay the 35 percent tax rate.
More: The Congressional Budget Office “International Comparisons of Corporate Income Tax Rates.” (PDF)
Finally, the National Law Journal ($) has a look at which schools saw the most alumni promoted to partner during 2016.
The top 5 were:
- NYU (64)
- Harvard (53)
- Georgetown (50)
- Columbia (48)
- U Michigan (36)
Although it’s not explicitly stated, I am pretty sure this list only considers partnerships at top 100 law firms and doesn’t control for varying law school class sizes.
My alma mater, (U Minnesota) was about number 41 on that list, which given its size and location isn’t a surprise.
Photo: Nigel / N-X Vision Photography, UK.