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Wed 26 April, 2017

15:31 If Trump changes your taxes, here are the deductions and breaks that could go away» Top News & Analysis
The elimination of some popular deductions could expose more of the average household's income to taxes.
15:30 The last time companies got a break on overseas profits, it didn't work out well» Top News & Analysis
Rather than use the money for hiring and capital purchases, companies plowed the cash into buybacks and dividends.
15:28 The Ultimate Guide To A Perfect Weekend In Champagne» Forbes Real Time
Just a mere hour from Paris, France's Champagne region beckons with exquisite bubbly, remarkable history, Michelin dining, and Five Star accommodations.
15:28 Inside The Chalk Caves of Champagne Taittinger» Forbes Real Time
15:27 An 'ocean of auto big data' is coming, says Barclays» Top News & Analysis
As cars increasingly become another "thing" in the internet of things, an ocean of data will inundate companies.
15:27 The YouTube Dilemma: When Digital Advertising And Objectionable Content Collide» Forbes Real Time
The problem for brands, of course, is that it’s no longer as easy to know where campaigns are appearing. There are literally millions of websites and apps. And some of them publish material that no brand would want its name associated with.
15:26 Futuristic Accomplishments With the Jetson Adventure Electric Bike» Forbes Real Time
Technological innovation inexorably bends to better products. In the case of electric bikes, we are entering a golden age. The new Jetson Adventure is a prime example of form and function.
15:25 Regulator Outlines Net-Neutrality Rollback» WSJ.com: US Business
A top federal regulator proposed rolling back Obama-era net neutrality rules, proposing a new rule-making proceeding to reverse the 2015 rule that reclassified internet providers as common carriers, subjecting them to utility-style FCC oversight.
15:25 Trump Calls for Cuts in Business, Individual Taxes» WSJ.com: US Business
Under President Trump’s proposed tax overhaul, the corporate rate would drop to 15% from 35%, with a 35% top rate for individuals. Lower brackets would be set at 10% and 25%. The plan would end deductions for state and local taxes, and the alternative minimum tax would be repealed.
15:23 Harry Boxer’s two infrastructure stocks to watch» MarketWatch.com - Top Stories
Caterpillar and Deere had big breakouts this week.
15:23 Anthem Says ACA Payment Loss Could Cause 20% Premium Hike» WSJ.com: US Business
Anthem Inc. said the loss of key federal payments that support Affordable Care Act plans could push premiums up 20% or more and lead it to pull back from the business.
15:23 Rex Nutting: Trump rushes out a tax plan based on a deception» MarketWatch.com - Top Stories
The Trump administration’s tax plan is based on the delusion that cutting taxes for the “job creators” will unleash a flood of economic growth, writes Rex Nutting.
15:22 Budget Director, After Health-Law Missteps, Preps for Spending Battle» WSJ.com: US Business
When the Republican health-care overhaul collapsed, Mick Mulvaney told President Trump he let him down. But the setback did little to block the trajectory of a man now entrusted with leading talks on a spending bill.
15:22 Futures Movers: Oil ends off highs as gasoline prices drop» MarketWatch.com - Top Stories
Oil futures settle with a slight gain on Wednesday, well off the session’s best level after U.S. government data reveal the largest weekly crude supply decline of the year, but also show unexpected inventory increases for gasoline and distillates.
15:21 Tesla Model S loses Consumer Reports' top ranking» Business and financial news - CNNMoney.com
Tesla Model S loses top ranking from Consumer Reports, one of its biggest fans.
15:21 ESPN laying off 100 on-air personalities, writers» Business and financial news - CNNMoney.com
ESPN, facing increased pressure on costs as it loses subscribers, plans a major round of job cuts, a source tells CNNMoney.
15:19 Microsoft Earnings: What to Expect» WSJ.com: US Business
Investors will look for further growth in Microsoft’s cloud-computing business when the company reports earnings after the market closes Thursday.
15:19 Retail stocks move higher after Mnuchin shoots down controversial tax proposal» Top News & Analysis
Retailers from J.C. Penney to Target had been extremely vocal about the impact a border adjustment tax would have.
15:18 Trump's tax plan is missing a number of important details» Markets

donald trump shrug

The White House rolled out the opening salvo of President Donald Trump's massive tax cut plan Wednesday, but the one-page set of bullet points was  missing some significant details.

 

The plan, laid out by Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn, called for three new income-tax brackets, with rates of 10%, 25%, and 35%, down from the current seven brackets.

What the plan does not detail are the income levels associated with each bracket. Currently, for instance, an individual making between $18,650 to $75,900 pays a 15% effective rate. It's unclear where that level of income would fall under the Trump plan. 

For instance, if the new bracket for the 10% rate only extends to people making up to $75,000 annually, Americans making $75,001 could see their taxes jump to the 25% rate.

In response to a question, Cohn said a family of four making $60,000 would have a lower tax rate, but did not provide further details.

Another key missing detail pertains to the repatriation tax. The one-time tax would allow companies to bring profits held overseas back into the US at a lower tax rate.

This isn't a new idea: A similar repatriation was carried out under President George W. Bush in 2004. Unlike the earlier proposal, which taxed the money coming back in at 5.25%, the new plan released on Wednesday did not provide any detail on the rate.

Republican congressional leaders said the initial plan "will serve as critical guideposts for Congress and the Administration as we work together to overhaul the American tax system." But many economists decried the lack of details in the Trump plan.

"Nearly six months after the election, the administration’s tax proposals amount to less than a single side of paper," Paul Ashworth, chief US economist at Capital Economics, said in a note to clients following the release.

"The best that can be said is that the president is laying out his opening bid in what could prove to be a very long and fraught negotiation," Ashworth continued.

Citi analysts said the announcement was an "an underdelivered 'big announcement' from the Trump administration."

Or as Brookings Institution economist and New York Times columnist Justin Wolfers put it, "I have been to interpretive dance performances which contain more detail on the tax code."

SEE ALSO: UNVEILED: TRUMP'S TAX PLAN

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NOW WATCH: 'Stop shaking your head again': Watch Spicer's tense exchange with a reporter over alleged White House scandals

15:18 Market Extra: Will Trump tax-cut plan stir animal spirits in M&A?» MarketWatch.com - Top Stories
Here’s how the tax plan could affect the outlook for deal makers.
15:16 The Wall Street Journal: Under Armour’s online overlap could cannibalize men’s shoe business» MarketWatch.com - Top Stories
Credit Suisse analysis shows that many Under Armour shoes are available across a number of sites, which could cause cannibalization
15:16 Maria Sharapova's comeback in ten pictures» Forbes Real Time
15:16 Maria Sharapova's Winning Comeback In 10 Pictures» Forbes Real Time
"It’s a journey, and it starts today and I’m looking forward to playing as many matches as I can.”
15:15 How The NY Time's #FakeEconomics Helped Destroy An Excellent Tax Reform» Forbes Real Time
When it comes to the House Republican Tax Plan, the NY Times has been spreading fake economics.
15:15 How 365 Days Can Completely Change Your Life» Forbes Real Time
How I went from an unsatisfying corporate job to traveling the world in just a year.
15:12 From Diapers to Soda, Big Brands Feel Pinch as Consumers Pull Back» WSJ.com: US Business
Slowed spending cut into results for Procter & Gamble, PepsiCo and Nestlé, and executives blame a range of factors including higher gas prices, bad weather and a growing affinity for beards.
15:12 Earnings Outlook: Exxon, Chevron earnings: Growth plans under the microscope» MarketWatch.com - Top Stories
Exxon and Chevron are scheduled to report first-quarter earnings on Friday amid questions about where the two oil giants will invest next.
15:12 City Harvest Gala Raises Over $2.7 Million To Feed Hungry New Yorkers» Forbes Real Time
"We're not just talking about the homeless or the poor, we're also including the lower middle class, who have to make a choice: do they buy healthy, nutritious food, or do they pay the rent?"
15:12 City Harvest's 23rd Annual Gala» Forbes Real Time
15:10 Deep Dive: Four stocks that would get an immediate boost from Trump’s tax reform» MarketWatch.com - Top Stories
Erick Ormsby of Alcosta Capital Management says the companies are already improving earnings.
15:10 Call For Jailed Drug Kingpin El Chapo's 'Billions' In Assets To Pay For Border Wall Unlikely To Fly» Forbes Real Time
Senator Ted Cruz has proposed a bill calling for $14 billion of illegal assets allegedly owned by druglord "El Chapo" Guzmán to be used to pay for a border wall, but analyst say it is likely to face monumental political and legal obstacles.
15:09 On Becoming the Most Wanted Data and Analytics Firm in Europe» Finextra Research Headlines
It’s a tall order. To become the most wanted data and analytics firm across an entire continent, tha...
15:08 Call of Duty: World War II First Screenshots» Forbes Real Time
15:08 Everything You Need To Know About The 'Call Of Duty: World War II' Reveal» Forbes Real Time
Here's everything you need to know about the worldwide reveal of 'Call of Duty: World War II.'
15:07 U.S.-based stock funds attract most cash in five weeks: ICI» Reuters: Money
NEW YORK (Reuters) - Investors in U.S.-based mutual funds and exchange-traded funds poured $4.7 billion into stock funds in the week ended April 19, marking the biggest inflows in five weeks as...
15:05 Breakingviews: Twitter will need more than just user growth for investors to stick around» Top News & Analysis
The struggling social-media company touted user growth as evidence it can get back on track
15:04 Blood test offers hope for better lung cancer treatment» AP Top Business News at 3:20 p.m. EDT
BOSTON (AP) -- Researchers have taken an important step toward better lung cancer treatment by using blood tests to track genetic changes in tumors as they progress from their very earliest stages....
15:04 March For Science Is America's Pep Rally For Data» Forbes Real Time
Objective facts, collected with care and scrutinized by knowledgeable critics, are the raw material of good scientific research. Facts are equally important to supporting business decisions.
15:03 What every American worker can learn from Trump’s first 100 days» MarketWatch.com - Top Stories
Trump isn’t the only one with a to-do list for the first few months.
15:02 Trump calls for dramatic tax cuts» Business and financial news - CNNMoney.com
Read full story for latest details.
15:02 Mnuchin: Trump has 'no intention' of releasing tax returns» Business and financial news - CNNMoney.com
Read full story for latest details.
15:00 0.2% Of Nasdaq Companies Accounted For 45% Of Its Recent Gains»

Just five of the more than 2,500 companies in the Nasdaq Composite Index are largely responsible for Tuesday’s first-ever close above 6,000.

The big five are Apple Inc., Amazon.com Inc., Facebook Inc., Microsoft Corp. and Alphabet Inc., Google’s owner.

Together they accounted for about 45 percent of the Nasdaq’s rise from 5,500, reached on Jan. 6, according to data compiled by Bloomberg.

As a reminder, the Big 5 account for over 10% of total US stock market capitalization now... a record high...

The question is, of course, what happens next?

15:00 Twitter Revenue Slides for First Time» WSJ.com: US Business
Twitter said nine million new monthly-active users joined its network in the first quarter but revenue fell for the first time since the company went public, raising questions about how it is going to hit its goal of becoming profitable this year.
15:00 Few agencies have the regulatory czars Trump requested» Top News & Analysis
CNBC reached out to 20 agencies to inquire about the status of the regulatory reform appointment and the progress of the corresponding task force.
15:00 Mark Zuckerberg And Priscilla Chan's Philanthropy Backs Effort To Change Scientific Publishing» Forbes Real Time
The Chan Zuckerberg Initiative, the philanthropic investment firm created by Facebook founder Mark Zuckerberg and his wife, Priscilla Chan, will fund an effort to allows biologists to share drafts of papers before they are published in peer-reviewed scientific journals like Nature or Science.
15:00 Jeff Goldblum Will Bait Older Audiences Who Didn't Like 'Jurassic World'» Forbes Real Time
Jeff Goldblum's Dr. Ian Malcolm, the most popular actor/character in the franchise, will return for next summer's big sequel.
14:59 VA limiting new hiring as it aims to widen private care» AP Top Business News at 3:20 p.m. EDT
WASHINGTON (AP) -- Despite the lifting of a federal hiring freeze, the Department of Veterans Affairs is leaving thousands of positions unfilled, citing the need for a leaner VA as it develops a longer-term plan to allow more veterans to seek medical care in the private sector....
14:58 Capitol Report: U.S. is late to corporate tax-cutting party rest of world is enjoying» MarketWatch.com - Top Stories
Tax experts disagree over how much a big reduction in corporate tax rates would help the U.S. economy, but one thing is clear: the rest of the world believes lower rates are good for them.
14:58 10 college majors where women go on to earn more than men» Top News & Analysis
Research shows that in some instances, the gender pay gap can hurt men, too.
14:56 Currencies: Dollar pares advance vs. yen as White House unveils tax-reform plan» MarketWatch.com - Top Stories
The dollar advances against the yen on Wednesday as Trump administration officials tease out details of a tax-reform proposal.
14:55 Trump's tax cut plan only pays for itself with growth in 'fairyland'» Top News & Analysis
President Trump's business tax cuts will be cheered in corporate boardrooms, but critics say they'll add trillions to the national debt.
14:54 Netflix's 1.3 bln euro bond offering prices at with a 3.625% coupon» MarketWatch.com - Real-time Headlines
This is a Real-time headline. These are breaking news, delivered the minute it happens, delivered ticker-tape style. Visit www.marketwatch.com or the quote page for more information about this breaking news.
14:52 Morgan Stanley said it's 'struggling to understand' US Steel's results (X)» Markets

Screen Shot 2017 04 26 at 1.33.49 PM

Shares of US Steel are getting obliterated Wednesday, losing a quarter of their value after whiffing on earnings and delivering disappointing guidance.

US Steel declared a $0.83 per share loss that was far below analysts' expectations for positive earnings of $0.35 per share. Additionally, the company missed on revenues, generating $2.73 billion versus expectations of $2.95 billion.

The enormous miss has some on Wall Street dumbfounded. Morgan Stanley analyst Evan L. Kurtz said in a note to clients after the April 26 earnings statement that he had two major questions for the company. 

First, full year earnings guidance was cut by management from $1.3 billion to $1.1 billion. Kurtz said that does not totally make sense. He wrote:

"An accounting change moved $175 mn from opex to capex, so the cut was closer to $375 mn. Furthermore, HRC is about $15/t higher from last quarter and tubular has improved, both of which should have moved guidance higher. So in essence, the guidance cut was more than $400 mn." 

Kurtz said that US Steel attributed the guidance cut to its "asset revitalization plan," but with capital expenditures only expected to be up $150 million, the analyst said he can't make sense of the guidance cut and needs more clarity from management. 

In addition, Kurtz said he is "struggling to understand how costs moved up so much."

US Steel showed in its earnings presentation a $95 million drag on earnings from costs excluding raw materials. After adjusting for various accounting maneuvers, the drag would equal about $140 million, according to Kurtz. However, he added that he would be surprised if all of the various headwinds he could think of would add up to this figure. 

For now, Morgan Stanley, is keeping its "Overweight" rating and $48 price target on the stock. However, Kurtz said said he has a lot of questions for management when it hosts a call on April 26.

Click here for a real-time US Steel chart.

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NOW WATCH: Warner Bros. might have to pay $900 million if it can't prove ghosts are real

14:51 Google Maps now remembers where you parked your car» Business and financial news - CNNMoney.com
Read full story for latest details.
14:49 FCC chair unveils plan to roll back net neutrality» Business and financial news - CNNMoney.com
The FCC's attempt to roll back net neutrality has officially begun.
14:49 Chobani sues Alex Jones over 'migrant rapists' claim» Business and financial news - CNNMoney.com
Chobani, a yogurt company, is suing Alex Jones, the aggressive conspiracy theorist with a radio show and a large YouTube following, over his claims that Cobani supported "migrant racists."
14:49 Israel-Syria-Iran Conflict Would Severely Strain Iran Nuclear Agreement» Forbes Real Time
BY THOMAS BUONOMO -- Among the potential consequences of an Israel-Syria-Iran conflict could be a breakdown of the Iran nuclear agreement under the weight of increased unilateral U.S. sanctions.
14:49 These 10 retailers could be next on activist investors' hit list» Top News & Analysis
The retail sector is grabbing the interest of activist investors. Here's who could be next.
14:48 Trump is about to use a budget trick to steal from an entire generation» Markets

Trump Mnuchin

Now we know a bit more about Trump's massive tax cut (the biggest in history).

We know that it's intended to be a simplification, that would cut corporate tax rates to 15% and eliminate deductions and things like the Alternative Minimum Tax (a big deal for Trump himself).

We know that, according to the Tax Policy Center, that the corporate cut alone will cost the country $2 trillion over 15 years.

Most importantly we know that if it has any hope of survival, the plan's architects must engage in a massive generational theft, and they'll to use a classic budget trick to pull it off.

The trick is a method is called dynamic scoring, which in reality is just a fancy way of justifying massive increases in the national debt.

"As we said we're working on a lot of details," said Treasury Secretary Steve Mnuchin at Wednesday's press conference unveiling the plan, "this will pay for itself with growth and reduced deductions."

Dynamic scoring has to do with the "growth" part of Mnuchin's explanation. In order to make tax cuts that look like they won't put a massive hole in the budget, policy "wonks" estimate the future benefit of tax cuts to the economy after making a load of assumptions — including about what a future government might do in response to falling tax revenue.

Those imagined benefits are then added to future budget projections and, BOOM, you've got a healthy-looking balance sheet for America.

Now, one might think that so-called fiscally conservative Republicans would be opposed to things like this, and that Trump might face opposition from his own party.

But he won't. And that's because there is a way to make Washington's budgets sound more sensible than they actually are. That's where dynamic scoring, much beloved by deficit hawks like House Speaker Paul Ryan, comes in.

The Republican-controlled House adopted dynamic scoring last year, but it's still up for debate in the Senate, where opponents like Sen. Bernie Sanders of Vermont have been critical of the practice. They say it politicizes the budgeting process.

That's in part because there's no exact way to dynamically score anything. This is not a science. There's no set process, and there are no set rules on the assumptions made. For example, Mnuchin said during the press conference that his office is playing with a bunch of different models (that's reassuring).

gary cohn steve mnuchin

So back when GOP lawmakers put pressure on the nonpartisan Joint Committee on Taxation to use dynamic scoring, it was unclear to Tom Barthold, the economist who heads the group, exactly what that means.

What we do know, though, that both the Reagan and Bush administrations argued that tax cuts, especially for the wealthy, would pay for themselves. In both instances, this got us in trouble.

More from the Tax Policy Center:

"If 'dynamic scoring' means that Congress can use any macroeconomic model it wants, then we are thrown back 100 or 150 years in terms of the rigor of our thinking. There are too many models with a very wide variety of assumptions and implications. It is not exactly true that you can find a model that will support any claims, but this is sometimes uncomfortably close to the truth."

So all Trump has to do is zoom in on the model that shows that cutting taxes for the rich while spending tons of money will be great for the economy, and this plan is a go.

How hard do you think it will be to find that in Washington? 

An earlier version of this piece appeared on Business Insider in November of 2016.

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NOW WATCH: 'Our parties have moved further and further apart': Watch Obama’s first speech since leaving office

14:47 Trump tax cut sounds great but markets are skeptical it would send interest rates flying » Top News & Analysis
The Trump administration plan to cut corporate taxes was met with skepticism because it could boost the deficit.
14:47 Op-Ed: Here's the biggest problem with Trump's tax plan» Top News & Analysis
Let's get real. Trump's tax cuts are not going to pay for themselves, says Ron Insana.
14:46 Baltimore Millennials' "City Life" Narrative Starts To Crack»

Via StockBoardAsset.com,

In the Federal Reserve’s zero lower bound, the millennial generation in Baltimore has been flocking to the city on an illusionary premise of Baltimore’s revival. One of the largest narrative’s in Baltimore was Under Armour’s deployment of gentrification via Kevin Plank’s Sagamore Developments. The narrative has held strong for the past decade inducing millennials to move to the city and buy real estate. In recent times, the narrative has started to crack with with the recent -65% crash in Under Armour’s equity.

In response, management has unleashed the first wave of cost cutting measures including layoffs reported by The Baltimore Sun Newspaper. The first round is roughly two dozen, but we have reason to believe there could be multiple phases. The individuals who are being laid off are the very same millennials who bought into the narrative of revival.

 

To make matters worst, Baltimore was just ranked the third fastest city in decline by the US Census. It’s so bad, that Baltimore City has reached a 100 year population low.

In any city, a dwindling population always attracts crime, and that is exactly what is happening.

If you piece together the puzzle, it appears Baltimore’s outlook for 2017 is bleak. Residential real estate prices are stalling and it appears that the millennial generation who bought into the revival narrative could be holding the bag.

Across the country, millennials are flocking to urban areas, which is totally reverse from the prior generation of the great migration to suburbia. What millennials in Baltimore don’t understand is the current state of their community and the 50-years of decay will bring a lot of future overhang.

Bonus: Only in a stock market bubble can Under Armour CEO build his own hotel across from head quarters

But better yet, build his own whiskey distillery 1.5 miles away to numb the pain of the -65% <UAA> crash. Strange times in a zero lower bound.

14:45 Stock traders don't seem to care about Trump's tax plan» Markets

Donald Trump

President Donald Trump's long-awaited tax plan came and went with a whimper, at least judging by the stock market's reaction.

A 50-company basket of highly taxed companies maintained by Goldman Sachs pared gains following the announcement, now up 0.4% for the day.

The lack of enthusiasm for the index stands in contrast to the months following the presidential election, when it ripped as much as 14% higher through the end of February.

The muted reaction was mirrored more broadly by the S&P 500, which also fell from pre-tax plan levels after a short-lived spike up near an intraday high. The benchmark rose 0.2% as of 2:25 p.m. ET.

Now that an update on Trump's tax plan has failed to further ignite a stock market yearning for progress, investors must now reassess the areas that have gained the most on expectations of bullish policy. 

S&P 500

SEE ALSO: UNVEILED: TRUMP'S TAX PLAN

SEE ALSO: One plunging stock shows exactly what's at risk with the Trump trade

SEE ALSO: The Trump trade looks dead

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NOW WATCH: This man spent 6 weeks working undercover in an iPhone factory in China — here's what it was like

14:44 Stocks tick higher, S&P 500 flirts with record» AP Top Business News at 3:20 p.m. EDT
NEW YORK (AP) -- Stock indexes ticked higher on Wednesday, and the Standard &amp; Poor&apos;s 500 index flirted with its record high, as the White House unveiled a broad outline of its plan to cut tax rates....
14:43 Excessive Rank Tracking Is Ruining Your SEO Campaign: Here's How» Forbes Real Time
Checking your rankings excessively can not only give you a false impression of your campaign's success, but can actually compromise its potential.
14:43 Department Of Education Moves To Make Student Loan Process Easier While IRS Tool Is Down» Forbes Real Time
Applying for financial aid isn't going to be as bad as feared this year after all. The Department of Education Department has agreed to allow colleges and universities more flexibility to use as part of their verification procedures while the Data Retrieval Tool (DRT) is unavailable.
14:43 She Didn't Get A Flu Shot, So NYU Fired Her From A Position She'd Held For 36 Years» Forbes Real Time
Psychologist Leonore Tiefer lost her unpaid position at NYU because she did not comply with a new policy mandating that all employees get immunized to prevent the spread of flu to patients. Tiefer didn't see patients, and her case raies questions abou the ethics of such policies.
14:41 The Latest: GOP leaders offer mild praise for Trump tax plan» AP Top Business News at 3:20 p.m. EDT
WASHINGTON (AP) -- The Latest on President Donald Trump&apos;s tax overhaul (all times EDT):...
14:40 Online, Under Armour Spreads Itself Thin» WSJ.com: US Business
New research published this month shows Under Armour is selling many items, particularly premium footwear like its Steph Curry basketball shoes, at multiple retailers, a level of overlap that could push prices lower and confuse shoppers in an already competitive market.
14:38 Trump's plan calls for the repeal of a tax that once cost him $31 million» Markets

Donald Trump

President Donald Trump's administration unveiled a tax plan on Wednesday that proposes lower taxes across the board and a number of alterations to the tax code.

Treasury Secretary Steven Mnuchin and National Economic Council director Gary Cohn announced the plan during a White House press briefing.

One proposal in the plan is the repeal of the so-called alternative minimum tax. The decades-old tax, which was enacted to make sure the rich pay their fair share, cost Trump $31 million in 2005. 

As Business Insider's Jim Edwards reported, that "accounted for most of the $38.5 million in taxes" the president paid in 2005.

What is the alternative minimum tax?

The original purpose of the AMT was to prevent very wealthy Americans from using deductions and loopholes to skimp on their taxes.

One way to look at it is as a secondary tax code. The AMT has a set of rates and rules that are distinct from the regular tax code and apply to certain high-income earners, trusts, estates, and corporations.

So when corporations or individuals fall under the auspices of the AMT, their tax bills are figured out differently than those of ordinary taxpayers.

According to Bankrate's Kay Bell, "Basically, it's the difference between your regular tax bill, figured using ordinary income tax rates, and your AMT bill, figured by filling out more IRS paperwork. When there's a difference, you must pay that amount, the AMT, in addition to your regular tax."

The point of the AMT is to make sure wealthy Americans who earn above a certain amount pay a flat minimum tax rate — hence the name — even if they could get away with paying zero or very little taxes in the regular system. But many opponents of the tax say it now targets people in the upper-middle class, not the uber-rich.

Here's the history

fox hunt alcohol rich peopleThe AMT originated in the late 1960s. The Department of the Treasury said that about 150 people legally paid zero federal income tax in 1966 by claiming deductions "and not including certain kinds of income." Naturally, taxpayers of modest means were ticked off about this.

According to Forbes, Congress received more complaints about those "tax-dodgers" than it did about the Vietnam War. So it responded by enacting the minimum tax, the AMT's predecessor, in 1969. The current version of the AMT was implemented in 1982. Since then, it has received several touch-ups.

Today, however, the AMT, doesn't strictly apply to superrich Americans, as it was originally intended. Since the AMT wasn't indexed for inflation until 2013, the number of people who fall under the AMT umbrella has increased significantly since the 1970s and includes "30 percent of households with cash income between $200,000 and $500,000," according to figures from the Urban-Brookings Tax Policy Center cited by Bloomberg. In total, it applied to 3% of all taxpayers in 2005, according to data from the IRS.

Why some people think it's a good idea to repeal or replace it

Most critics of the AMT oppose the tax because it doesn't target the people and organizations it was originally aimed at.

"It was originally targeted at the super-wealthy when it came out, but the super-wealthy in most cases don't pay it," Scott Aber, a certified public accountant, told CNBC in December.

Daniel Shaviro is a professor at the New York University School of Law, and he knows a thing or two about the AMT — he played a role in changing the tax in the 1980s.

He told Business Insider that the law in its current form "doesn't address [today's] tax-avoidance methods."

"It does not address sophisticated modern tax-avoidance techniques, such as Larry Ellison, who is worth $50 billion, getting a $1 salary and borrowing against the value of his appreciated stock, or companies such as Apple directing their global profits to tax-haven subsidiaries," Shaviro added.

Trump proposal to repeal the AMT would cost the fedeal government $412.8 billion, according to the Tax Policy Center. The president has said he would make up for that cost by reducing the number of deductions in the tax code.

Join the conversation about this story »

NOW WATCH: This man spent 6 weeks working undercover in an iPhone factory in China — here's what it was like

14:37 Mnuchin says Trump 'has no intentions' to release his tax returns» Markets

Steven Mnuchin

Treasury Secretary Steven Mnuchin said Wednesday that President Donald Trump "has no intentions" to release his tax returns.

ABC's Jonathan Karl asked Mnuchin during a press briefing on the Trump administration's new tax plan whether the president would finally make his tax returns public so Americans can see how he would benefit from proposed changes to the tax code.

"The president has no intentions," Mnuchin said. "The president has released plenty of information. And, I think has given more financial disclosure than I think anybody else. I think the American population has plenty of information on his taxes."

Mnuchin then cut off Karl as he was attempting to ask a followup question.

"Right there," Mnuchin said, pointing to another reporter in the briefing room, telling Karl, "excuse me, other people have the right to ask questions."

While Trump released a large financial disclosure report during his campaign for president, he broke with tradition by refusing to release his tax returns. Every major party candidate since 1976 made their tax information public prior to the election.

Trump has maintained for more than a year that he won't release his tax returns because he's under audit by the IRS. Last week, White House press secretary Sean Spicer said the returns were still under audit. The IRS can't comment on whether the returns are being audited, but being under audit does not prevent a person from releasing the returns.

"We're under the same audit that existed," Spicer said. "So nothing has changed."

Asked whether the president would ask the IRS to comment on the audit to prove it exists and provide a timeline for its completion, Spicer dodged.

"I think the president's view on this has been very clear from the campaign, and the American people understood it when they elected him in November," he said.

On Wednesday, Mnuchin was asked multiple times about how the changes to the tax code would financially benefit Trump, his family, and his businesses. The Treasury secretary did not provide an answer.

The tax reform outline provided by Mnuchin and National Economic Council chairman Gary Cohn included the elimination of the alternative minimum tax, or AMT. That provision in the tax code cost Trump an additional $31 million in federal income taxes in 2005, per the leaked tax information Trump filed that year. The AMT does, however, have critics on both sides of the aisle, many of whom believe it does not accomplish its goal of ensuring that the richest Americans don't avoid paying taxes through a litany of loopholes.

Watch Mnuchin's answer to Karl:

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