How Much Are Fortune 500 Companies Saving in Taxes?


It’s a well-known fact that many of the richest companies in America have become so financially successful thanks in large part to the tax-savings methods they employ, not the least of which is keeping large amounts of income overseas. These American companies have no problem doing business stateside, but because the U.S. has some of the highest corporate tax rates in the world, they can save millions in taxes by leaving that money in the country where it was earned.

In fact, according to a recent report from Citizens for Tax Justice, the largest Fortune 500 companies in America are storing as much as $2.5 trillion in foreign countries, which is $400 million more than last year. This is not hidden money, stored away in secret bank accounts, mind you, but rather revenue legally earned and held overseas. So why not bring the money back to the U.S.? As long as it stays overseas where it was earned the IRS can’t tax those earnings.

Of course, some people feel that isn’t fair, including the organization Citizens for Tax Justice, which wants the government to tax all income earned by U.S. companies, no matter what country it’s earned in. The problem with that scenario is that companies might decide to simply move their headquarters to other countries in order to avoid this extra tax, which could cost the country even more tax revenue, as well as jobs.

President Obama has recently proposed a 19 percent global minimum tax, which means any foreign subsidiary of a U.S. company that pays at least 19 percent in overseas taxes would be allowed to bring that money back to America without being taxed again stateside.

Of course, both current presidential candidates have their opinion on the matter. Donald Trump wants to significantly lower the corporate tax rate and combine it with a one-time 10 percent tax on any income being held in foreign countries. This could help give companies more of an incentive to bring the money home to the U.S. Hillary Clinton reportedly wants to keep the current standards but she also wants to add an “exit tax” for companies that leave.

Either way, it’s likely that companies will continue to keep foreign earnings overseas unless the government creates a more tax-friendly environment for American corporations.


You also might like the article Study Shows Benefit of Lower Corporate Tax

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How Would Proposed Tax Plans Affect the Country’s Economy?


We’re just days away from the election and it’s likely that most Americans will just be happy that it’s finally over, no matter whom or what they voted for. However, there are some very important things at stake in this election, including how each candidate’s tax proposals would affect our nation’s economy, as well as the affect on individual taxpayers’ pocket books.

The overwhelming belief is that Donald Trump’s tax plan would be simpler than the current code and that it would help the wealthy, while increasing the national debt. As you might expect, Hillary Clinton’s proposals would be basically the opposite. Her tax plan is reportedly more complex and it’s expected to increase taxes on just about everyone, with the wealthiest taxpayers absorbing the brunt of the increase.

However, that being said, neither candidate has to stick to his or her proposed plans if elected. Additionally, the bigger question is how would these plans really affect the economy if they were implemented? The nation’s debt is rising and it will likely continue to raise no matter which candidate is elected. That means people and businesses, especially small ones, will be footing the bill.

According to the Tax Foundation, which typically opposes tax hikes on the wealthy, Clinton’s plan to increase taxes on investment and businesses would likely reduce the size of economy by about 2.6 percent over 10 years. Much of that would come from her desire to increase the estate tax. According to the Tax Foundation that increase would likely cause wealthy taxpayers to invest lest money and thus would hold down the entire economy. That, in turn, would force the average income in the country to go down.

On the other hand, those who believe tax increases on the wealthy are favorable to the economy claim that the Tax Foundation’s estimates are exaggerated and that the economy would not be significantly damaged by Clinton’s proposals.

You also might like the article Trump, Clinton and the Wealthy—What’s at Stake

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Trump, Clinton and the Wealthy – What’s at Stake?


The 2016 presidential election is finally winding down and in a few weeks we’ll know who our next president is going to be. This election cycle has been very heated and the two candidates have been very polarizing. While most people at least have a routing interest in wins the election, there are some groups of people that will be affected more than others, including high-net-worth individuals.

As they are with every election, taxes and the economy have been a hot topic during this year’s battle for the White House. While both candidates claim to have tax plans that will help Middle America and at the same time give the country’s economy a boost, they both have completely different ideas on how to accomplish those goals.

One of the subjects where their tax policies differ greatly is how to tax the nation’s wealthiest taxpayers. As you might guess, one candidate’s proposals would benefit the wealthy greatly, while the other candidate’s would go after high-net-worth individuals with a vengeance.

According tot the Tax Center Policy, Donald Trump wants to cut taxes by more than $6 trillion, while Hilary Clinton wants to spike them by $1.4 trillion. Under Clinton’s plan, the top 1 percent would be paying most of that increase, with an average tax hike of $118,000. Under trump’s plan, the top earners would see an average tax savings of about $215,000.

On the business side of things, Clinton’s plan calls for an increase of $130 billion in business taxes, while Trump wants to cut them by more than $2.6 billion. The Tax Policy Center also notes that Trump wants to simplify the tax code, whereas Clinton would make it even more complex than it is now.

As for the candidates, they have different views of the report, with Clinton’s campaign claiming it’s further evidence that she wants the wealthy to pay their fair share, while Trump’s campaign calls the study “fraudulent.” For more on the tax Policy Center’s assessment of the two candidates’ plans click here.

You also might like the blog: Trump vs. Clinton and the Tax Plans we Could End Up With

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Believe it or Not, Clinton, Trump Do Agree on Something


Are you ready for the election to be over? While all presidential elections seem to bring out some of the worst in people, this one appears to have reached new levels of animosity and contention, which is constantly on display in the media. It’s no secret that Donald Trump and Hillary Clinton do not like each other. In fact, it would seem that they don’t see eye-to-eye on any major, or even minor issues.

However, despite all the heated debate and the constant bickering that has headlined this election, believe it or not, the two candidates do actually agree on at least one thing. Both candidates reportedly feel that hedge fund managers should be paying higher taxes.

During the second national debate both candidates agreed that the carried interest tax loophole should be eliminated. Carried interest is the amount that hedge fund managers receive when their clients earn a profit on investment returns. Thanks to this loophole, hedge fund managers only pay 23.8 percent on this income instead of 39.6 percent.

This loophole has benefited many of the nation’s wealthiest households for years, but even some of its beneficiaries feel it should be repealed. So despite the rancor between the two presidential candidates, they will have the carried interest tax loophole in common. At least they can agree on that.

You also might like the article: Trump vs. Clinton and the Tax Plans We Could End Up With

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Best and Worst States for Taxes for Startup Companies


Startup companies face many forms of opposition as they set out to change theworld, or at least carve out their own niche – even though they are typically workingto provide solutions. That doesn’t mean that people or other businesses opposethem, necessarily, but rather there are so many difficult things they have toovercome and fight through to become successful; not the least of which is theirtaxes.

When it comes to taxes and startup companies, location does matter. According to arecent study from CRN, your efforts to provide solutions for change will bechallenged more by higher taxes depending on where you live. According to thestudy, the ten best places for Millennials to start a business when it comes to taxesare as follows: Mississippi, Nebraska, Missouri, Arizona, New Mexico, Indiana,Delaware, Ohio, Oklahoma and Florida.

On the other end of the spectrum, if you want to change the world with your startupcompany then you might want to avoid these 10 states, which were rated the worstfor startup companies when it comes to taxes: Idaho, New Jersey, Illinois, Maine,New Hampshire, Kentucky, Arkansas, Massachusetts, Pennsylvania and the worstbeing Rhode Island.

So, if you want to start a company to help solve a problem, you might first want toconsider relocating to one of the top 10 states on this list, especially if you live in oneof the bottom ten.

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Inboard- Disrupting Urban Transportation

I recently met with Ryan Evans, CEO and Co-Founder of Inboard Technology. What he and his business partner have been able to accomplish with Inboard, in a relatively short period of time is amazing! From creating the first electric skateboard with motorized wheels to raising over $400,000 on Kickstarter, Inboard has definitely been able to gain a following and piqued the interest of not only skaters, but commuters and those living in urban environments. Inboard plans on shipping their first product the M1 globally starting in January of 2017. Above is a sneak peek video of my interview with Ryan Evans, to see the full interview click here.

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The Secrets to Becoming Wealthy


What’s the secret to success when it comes to obtaining and holding wealth? The truth is there isn’t one secret formula to become wealthy and stay wealthy. Chances are you will get a lot of different answers depending on whom you ask. However, it’s true that many people use the tried-and-true method of saving and investing.

Almost anyone can save his or her money and then invest it wisely, which means that almost anyone can eventually obtain wealth. So what kinds of strategies do the wealthy employ when setting out to build and protect their wealth?

First off, they tend to be married and they tend to stay married. In fact, according to one study married people typically have about 10 times the assets than single people by retirement age. Obviously, divorce can cripple your wealth as well; so being able to maintain one solid marriage will benefit your wealth. Likewise, having only one home can help you maintain wealth. Holding onto your home and passing it to your heirs will give it a new value and give the recipients a nice tax break.

The wealthy usually take risks. However, they don’t gamble with their wealth. There is a difference. The investment world is full of risk. There are very few “sure things” and it takes educated and sound strategies to make your investing successful. Safe investments usually pay off in the long run. On the other hand, while high-risk investments can be very lucrative, if they fail you can be left with almost nothing. So do take educated investment risks, but don’t gamble your wealth away with silly risks.

Wealthy individuals almost always use financial advisors to help them protect their wealth. While many people think they can manage it themselves, trained professionals can offer insight and expertise that will assist the wealthy in holding onto and increasing what they already have. These are a few of the secrets that high net worth individuals use to maintain their wealth. For more tips and advice please contact us at GROCO today.

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Taxes for Dummies

This is a great video explaining the US Government’s progressive tax system for those who don’t understand it! Is it fair that 16% of American taxpayers payed nearly 80% of all federal tax in 2014? Just to have politicians say that the wealthy haven’t payed their “fair share” yet.

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What Happens to the Wealthy if Latest Estate Tax Proposals Pass?


If you haven’t heard by now, there is a chance that wealthy business owners could be taking a big hit thanks to a proposal announced last month by the U.S. Treasury Department. We discussed this proposal in a previous blog: “Is Obama Secretly Trying to Raise the Death Tax Again?

According to the Treasury’s proposal, the practice of so-called valuation discounts would be slowed or even eliminated in certain situations. These discounts allowed for the transfer of a wealthy business, in part or its entirety, from a parent to a child, for example, to be done at a much lower tax rate. This new proposal would basically negate that discount on transferred business stakes. So what does that mean for wealthy business owners?

This proposal is squarely aimed at high net worth individuals and families that own a family business. With the change the value of a transfer of part or all of a business would no longer receive the valuation discount, which means the recipient would have to pay the full estate tax incurred. If you own a wealthy family business then now is probably a good time to meet with your wealth advisor, accountant or estate planner to make sure your estate plan is in proper order. Click here to contact GROCO for more info.

At the same time, for now this is still just a proposal and there will be a public hearing on the matter on Dec. 1. Additionally, there is a chance that this could all change again after the presidential election, as both candidates have strong opinions on the current estate tax. Stay tuned.

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Trump vs. Clinton and the Tax Plans We Could End Up With


If someone asked you to explain the differences between the two presidential candidates’ tax plans would you be able give a clear explanation? If you answered “no” most likely you aren’t alone. It’s not uncommon during a presidential election for most voters to be confused at what the candidates are actually promising or proposing. With so much back-and-forth rhetoric, it’s hard to know what each candidate really has in store.

According to Donald Trump, he wants to reduce taxes for everyone in America, especially middle-income Americans. According to numerous reports, Mr. Trump’s plan would reduce the tax system to just three tax brackets, with the top rate dropping from its current mark of 39.6 percent down to 33 percent. He also said that the wealthy would still pay their fair share, but not so much that it hinders the country’s ability to compete.

On the other hand, Hilary Clinton has yet to describe in detail what her tax plans for the middle class would be, or how they would be affected. However, she has made it clear that she wants to raise taxes on the ultra wealthy. Mrs. Clinton has stated that she wants anyone who makes more than a million dollars a year to pay a minimum of 30 percent, whether it’s from income or from capital gains. She would also like anyone who makes more than $5 million to pay an extra 4 percent.

Under Mrs. Clinton’s plan the top 1 percent would end up paying three-fourth’s of the additional taxes being collected, whereas under Mr. Trump’s plan the wealthy would be getting a tax cut of about 5.3 percent. Meantime, both candidates reportedly agree on eliminating the carried interest loophole that offers hedge fund managers a heavily discounted tax rate. Lastly, Mr. Trump wants to eliminate the estate tax completely, while Mrs. Clinton wants to raise it, as well as lower the threshold at which it starts to apply.

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