The Republican Party, commonly referred to as the "GOP" (abbreviation for Grand Old Party)
The GOP Tax Plan: What It Means For You
After multiple efforts to repeal and replace Obamacare failed, the GOP has one more major legislative achievement it’s hoping to pull off: Tax reform. The GOP’s tax reform bill has finally arrived, and it’s surprisingly lacking in ambition, which may spell doom before it even arrives on the floor. But if the bill does pass, prepare for a lot of misery come April as you try to sort through the sweeping changes.
Your taxes are getting much more complex. Much of what the GOP’s bill does is shift the burden onto the middle class. First, instead of seven tax brackets, the bill will shift to four: 12%, 25%, 35% and 39.4%. Currently, they’re 10%, 15%, 25%, 28%, 33%, 35% and 39.4%. The GOP hasn’t released the income ranges that will fall into these brackets, but it’s fairly safe to assume that some Americans will be getting a tax cut, some such as the poorest will be facing a tax increase, although supposedly the very poorest will not pay income tax at all, and the GOP is hoping to make up the difference by eliminating some deductions and increasing others.
The GOP wants to eliminate state tax deductions. At the moment, you can deduct property taxes, income taxes, and sales taxes, as well as local taxes, and that saves taxpayers $96 billion a year. This would affect taxpayers in every single state that charges any sort of tax at all, and will likely mean an increase in what you pay at the end of the year. While this would affect blue states heavily, it’d ding plenty of other states as well.
http://uproxx.com/news/what-is-gop-tax-plan-what-it-means/
Plan elements
The Act as of early November 2017 includes the following elements, among others, as reported by The New York Times:
Individual income tax rates
Reduces the number of marginal income tax rate brackets from seven to four. This has the effect of reducing taxes for most income levels. The income thresholds below apply to married couples filing jointly:
The top 39.6% bracket would be elevated to income greater than $1 million, rather than above $480,050 under current law.
The 35% bracket would apply to income from $260,000 to $1 million; the 33% bracket would be eliminated. This also has the effect of increasing the marginal rate applied to income between $260,000 and $424,950.
The 25% bracket would apply to income from $90,000 to $260,000; the 28% bracket would be eliminated.
A new 12% bracket would apply to income from $0 to $89,999; the 15% bracket would be eliminated.
Standard deduction and personal exemption
Changes to deductions and credits will impact families differently depending on the their particular circumstances.
Nearly double the standard deduction, from $6,350 to $12,700. About 70% of families choose the standard deduction rather than itemized deductions; this could rise to over 84% if doubled.
Eliminate the personal exemption, a deduction based on the number of taxpayers and dependents on a return.
Increase child tax credit from $1,000 to $1,600.
Property tax deductions[edit]
Mortgage interest deduction for newly purchased homes would be capped at $500,000, while the property tax deduction would be capped at $10,000. This would have more impact on taxpayers with more expensive property, generally those who live in higher-income areas.
State and local taxes[edit]
The deduction for state and local income tax and sales tax will be completely eliminated. Eliminating these deductions would increase taxes relatively more in states with higher taxes.
Other individual provisions[edit]
Repeal the Alternative minimum tax (AMT). The AMT primarily causes households earning between $200,000 to $1 million to pay more in taxes, so repealing it is a tax cut for higher-income persons.
Repeal the estate tax after six years. In the interim, the inherited wealth exempt from tax would be increased from $5.5 million to $11 million.
Pass-through businesses
Reduce the pass-through tax rate to 25% regardless of income level. Many businesses are incorporated as pass-through entities (e.g., sole proprietorships, partnerships, and S-corporations) meaning the owners pay taxes at individual rates. These represent 95% of businesses and most of corporate tax revenues, so this is a large tax cut for owners (i.e., capital as opposed to labor). Approximately the largest 2% of of pass-through businesses represent 40% of pass-through income and today are taxed at 39.6%, the top individual rate.
Corporate rates
The corporate tax rate would fall from 35% to 20% while eliminating most business deductions and credits. This change will bring the United States just below the average for advanced and larger economies.[16]
Miscellaneous tax provisions
The Senate version of the bill contains a variety of miscellaneous tax provisions, many advantaging particular special interests. Miscellaneous provisions include:
A tax break for citrus growers,allowing them to deduct the cost of replanting "citrus plants lost or damaged due to causes like freezing, natural disaster or disease."
The extension of "full expensing," a favorable tax treatment provision for film and television production companies, to 2022. The provision allows such companies "to write-off the full cost of their investments in the first year." The Joint Committee on Taxation estimates that the extension will lead to the loss of about $1 billion in federal revenue per year.
A provision ending a corporate tax exemption for certain international airlines with commercial flights to the United States (specifically, in cases where "the country where the foreign airline is headquartered doesn’t have a tax treaty with the U.S., and if major U.S. airliners make fewer than two weekly trips to that foreign country"). This provision is seen as likely to disadvantage Gulf airlines (such as Etihad, Emirates and Qatar Airways); major U.S. airlines have complained that the Gulf states provide unfair subsidies to those carriers.[18]
Reductions in excise taxes on alcohol for a two-year period.[19] The Senate bill would reduce the tax on "the first 60,000 barrels of beer produced domestically by small brewers" from $7 to $3.50 and would reduce the tax on the first 6 million barrels produced from $18 to $16 per barrel.[18] The Senate bill would also extend a tax credit on wine production to all wineries and would extend the credit to the producers and importers of sparkling wine as well.[17] These provisions were supported by the alcohol lobby, specifically the Beer Institute, Wine Institute, and Distilled Spirits Council.[19]
The bill passed by the House eliminates a tax deduction for teacher expenses.[20] The Senate bill, by contrast, would double the reduction, from $250 to $500.
Arctic National Wildlife Refuge drilling
In November 2017, the Senate Committee on Energy and Natural Resources passed legislation introduced by Republican Senator Lisa Murkowski that would require the Interior Department to lease 800,000 acres of land within the coastal plain area of the Arctic National Wildlife Refuge (ANWR) for oil and gas drilling. Republicans plan to fold this measure into the tax bill.[21][22] The move is part of the long-running Arctic Refuge drilling controversy; Republicans have attempted to allow drilling in ANWR almost 50 times, but thus far without success. The move was criticized by Democratsand environmentalist groups such as the Wilderness Society.
Repeal of Johnson Amendment
Included in the tax bill passed by the House is a provision that would repeal the Johnson Amendment, a 1954 law that disallows churches and other nonprofit groups from endorsing political candidates or engaging in other partisan political activities, enforceable by loss of nonprofit status.[23] The repeal has long been a key goal of the religious right, represented by groups such as the Family Research Council, Christian Coalition, Traditional Values Coalition, and Alliance Defending Freedom. Repeal is opposed by other religious leaders and organizations such as the United Methodist Church, National Council of Churches, and Baptist Joint Committee for Religious Liberty, which oppose blurring the distinction between charitable and political activities
The nonpartisan Joint Committee on Taxation estimated that repeal of the Johnson Amendment could result in the diversion of up to "$1.7 billion each year from traditional political committees to churches and other nonprofit groups that could legally engage in partisan politics for the first time."
Unlike the House bill, the Senate version of the bill does not currently include any modification to the Johnson Amendment.
https://en.wikipedia.org/wiki/Tax_Cuts_and_Jobs_Act_of_2017
Media Article:
THE GOP PLAN IS THE BIGGEST TAX INCREASE IN AMERICAN HISTORY, BY FAR
THE TAX BILL
moving its way through Congress is routinely referred to as a $1.5 trillion tax cut. And, in some ways, that’s true: on net, it would reduce the amount of taxes collected by the federal treasury by about $1.5 trillion over 10 years.
But that figure masks the eye-popping scale and audacity of the GOP’s rushed restructuring of the economy. Most immediately, the plan will take a large chunk out of state and local revenue that isn’t factored into that total. But more broadly, the bill cuts taxes by a full $6 trillion over a decade.
Senate Majority Leader Mitch McConnell, R-Ky., said Friday afternoon Senate Republicans have the votes to pass the plan, which gets referred to as only a $1.5 trillion cut because it raises $4.5 trillion in taxes elsewhere. But the key question is who gets a tax hike and who gets a tax cut. Put simply, the bulk of the tax cut is going toward the rich, while the tax increases go to everybody else.
And so the bill, properly described, is two things: the largest tax cut — and also the biggest tax increase — in American history.
Republicans have spent years describing the Affordable Care Act as the largest tax increase in U.S. history, ignoring the fact that the tax increases were balanced out by subsidies to pay for health coverage. In that respect, the ACA was a significant transfer of wealth from the top to the middle and bottom, which earned it the ire of the GOP. But all told, it raised less than $1 trillion in taxes over 10 years to pay for all that. The relative stinginess, in fact, is what fueled its unpopularity, as premiums and deductibles remained too high. But what Republicans lambasted as a historic tax hike represents just one-fifth of the tax increase of the new GOP bill.
Where’s that money going?
The Tax Policy Center estimated that about 80 percent of the benefit of the tax plan will go to the top 1 percent, who will enjoy the following elements of the tax cut:
A full $1.5 trillion alone is going to slash the corporate tax rate. CEOs have said repeatedly they plan to pocket that money rather than invest it or give workers higher wages.
The alternative minimum tax, paid almost exclusively by the rich, is also eliminated. That’s a $700 billion giveaway.
Another $150 billion goes to repealing the estate tax, which currently exempts the first $11 million of the deceased’s estate, so nobody even remotely middle class pays it. The repeal benefits so few people you can practically list them out.
More than $200 billion in cuts goes to a provision that allows a greater deduction for dividends on foreign earnings. That’s not for you.
Roughly $600 billion goes to reducing taxes on “pass-throughs” and other businesses not set up as corporations, which law firms, lobby shops, and doctors’ offices often benefit from. Poor and middle-class people do not tend to set themselves up as pass-throughs.
Under current law, many tax credits phase out at low-income thresholds. The GOP plan changes that by raising the threshold so richer people can also claim the credit. That provision alone is, by definition, a $200 billion tax cut for the wealthy.
Individual and family tax rates are cut by about $1 trillion, and some regular people will indeed see some of that money as a tax cut — but not much. As the New York Times noted, by 2027, people making between $40,000 and $50,000 would see a combined increase of $5.3 billion in taxes. Where would that money go? Folks earning more than $1 million would see their taxes collectively cut by $5.8 billion a year.
The list above brings the total well close to $5 trillion in tax cuts almost exclusively for the wealthy. The last major element of the bill, the doubling of the standard deduction, would benefit a broader range of people, but it comes at the expense of states, cities, and towns.
Where does the money to pay for all of this come from?
While Obamacare was a transfer of wealth from the top to the bottom, this bill sends money back the other way.
Even some of the ways the plan “raises” taxes on the rich wind up being a tax cut. Some $300 billion is raised by allowing companies who stashed profits offshore to repatriate it at a much lower rate. That repatriated cash will go straight to dividends for shareholders and stock buybacks — but it gets counted as a tax increase, which then allows the GOP to give an equal $300 billion cut on the other side of the ledger. It’s neat how that works.
The bill raises $1.6 trillion by repealing the personal exemption everybody gets on their tax returns. Getting rid of it across the board is extraordinarily regressive, since it gives the same benefit to the likes of Jared Kushner as it gives to people who have much less money than he does, so they’re hit much harder.
It raises another $1.3 trillion by going after deductions for state and local taxes, mortgage interest, charitable contributions, interest on student loans, medical expenses, teachers’ out-of-pocket expenses for paper and pencils for students, and a bunch of other nickel-and-diming of the middle class. No change drawer in the car, couch cushion, or plastic piggy bank is going untouched in the hunt for money to pay for the tax cut.
(The state and local deduction is effectively a subsidy for state and local spending on things like schools, roads, and police departments. Removing that will pressure states and cities to cut spending, so future teacher layoffs at your neighborhood school will be used to pay for the tax cuts, but because that happens at the state and local level, it isn’t factored into the Congressional Budget Office or Joint Committee on Taxation analyses.)
The plan gradually raises $128 billion in taxes by changing the way inflation is tabulated, so that your taxes slowly creep up over the years as the brackets come down.
And then, of course, the plan adds about $1.5 trillion to the debt over 10 years. That gets you most of the way to $6 trillion, with a handful of smaller tax hikes thrown in, some of which won’t obviously hurt the middle class. The domestic production deduction, a $96 billion boondoggle, is repealed, for instance, and $54 billion is saved by ending the credit for testing cures for rare diseases.
House Speaker Paul Ryan, R-Wis., went on NPR on Friday morning to try to defend the largest tax hike in American history.
“What does it say that — in practice according to independent analyses, I mean you do have winners and losers, not everybody gains, businesses gain, people with large estates to leave to their heirs gain, high-income people gain — but a lot of middle-income people do not gain in terms of money,” NPR’s Steve Inskeep said.
“I disagree with that. The average tax cut for a middle-class family is going to be $1,182,” Ryan responded.
Inskeep pushed back. “Lily Batchelder of New York University took some numbers from the Joint Committee of Taxation, bipartisan part of Congress as you know very well, and concluded that something like 100 million households in this country under the House bill, and even more under the Senate bill, would either get no tax cut or would get a tax increase,” Inskeep said. “Does that sound right to you?”
It didn’t sound right to Ryan.
“No, it doesn’t sound right unless it’s a person that’s not paying taxes already,” he said. “I think some people are cherry picking statistics.”
https://theintercept.com/2017/12/01/the-gop-plan-is-the-biggest-tax-increase-in-american-history-by-far/
McConnell says Senate has the votes to pass GOP tax bill
Senate Republicans said Friday that they had secured enough votes to pass a landmark $1.5 trillion tax package after making a few final deals to get wavering senators on board.
“We have the votes” Majority Leader Mitch McConnell (R-Ky.) told reporters after meeting with his caucus.
Almost simultaneously, Sen. Jeff Flake (R-Ariz.), a key holdout, announced his support for the legislation that delivers massive tax cuts to corporate America and the wealthy while bestowing mixed blessings on everybody else.
“I am pleased to announce I will vote in support of the tax reform bill,” Flake said in a statement. He said he had secured leadership support for priorities related to expensing and to a solution for immigrants brought illegally to this country as children.
Earlier Friday Sen. John Cornyn (R-Tex.) had told reporters that GOP leaders had enough votes to pass the tax package, expressing optimism after a night of high-stakes negotiations. We “have at least 50, and we’re still working,” Cornyn said.
The tax package still must clear several hurdles before it can become law. Once the Senate passes the bill, GOP leaders must reconcile differences between the Senate bill and a version that passed the House several weeks ago. They are optimistic they can do this, but a number of issues must be resolved, and there will be major implications for the taxes paid by families and individuals based on how those discussions go.
Securing the final few Senate votes forced GOP leaders to add more than $250 billion in tax cuts for individuals and businesses to their plan. To offset some of these costs, they had to abandon efforts to fully repeal the alternative minimum tax for individuals and companies, according to a brief summary of the changes that was shared with GOP members. Instead of fully repealing the AMT, they will now try to scale it back.
[Why it’s such a big deal the Senate tax bill would add $1 trillion to debt]
The AMT was put in place in the 1980s as a way to prevent wealthier Americans from using tax deductions to avoid paying taxes.
The comments from Cornyn, the second-ranking Republican in the Senate, came hours after Sen. Ron Johnson (R-Wis.) said he planned to back the bill. He was one of the last holdouts, though the GOP needed a little more help to ensure they had the 50 votes they needed.
During a tense standoff Thursday evening, Johnson and Flake joined Sen. Bob Corker (R-Tenn.) and threatened a last-minute objection to stop the tax bill from passing. This forced GOP leaders to scramble to try to accommodate some of their concerns.
orker and Flake had pushed for the possibility of hundreds of billions of dollars in tax cuts to be scaled back as a way to minimize the package’s impact on the government’s $20 trillion debt and had called for a “trigger” to kick in and raise taxes if economic growth estimates don’t pan out. The trigger was not among the concessions that Flake said he had extracted from GOP leaders in exchange for his support.
[Fact Checker: President Trump says the tax bill will ‘cost me a fortune.’ That’s false.]
As the Senate GOP meeting broke up on Friday, Sen. Ted Cruz (R-Tex.) told reporters that the bill would not include the tax increases. It’s the “right thing to do,” rather than “larding the bill up with additional taxes.” Cruz said.
Later in the day, Sen. James Lankford (R-Okla.) said there was nothing in the bill to accommodate those deficit concerns.
“I think it’s a stronger bill with a safety net ... but that’s not what we have,” ” Lankford said, noting the push to get the bill through Congress by the end of the year. “I’m going to be yes either way. It’s walking the tightrope with a net or without a net. You prefer to have a net, but I think it’s going to work.”
GOP leaders were also working to incorporate changes from Sen. Susan Collins (R-Maine), such as allowing Americans to deduct up to $10,000 in property taxes from federal taxable income. This change would save taxpayers $148 billion over 10 years compared with an initial version of the bill, according to the document circulated by Republican lawmakers Friday afternoon.
Cruz said that the bill would include Collins’s demand on the state and local tax deductions.
Collins later tweeted: “Delighted that the Senate has agreed to include my property tax deduction amendment, that will allow 166,000 Maine taxpayers who itemize to deduct a total of $725 million in property taxes each year.”
Key in securing Johnson’s support was a move by GOP leaders to expand tax cuts for millions of businesses, known as pass-throughs. These are companies that pass their income on to partners, owners, and investors, who in turn pay taxes on the earnings through the individual income tax portion of the tax code.
Senate GOP leaders had proposed allowing these investors to deduct 17.4 percent of their income from their taxes and then pay taxes on the remaining income. Johnson and Sen. Steve Daines (R-Mont.) argued for days that this was not generous enough for these businesses, and GOP leaders reluctantly raised the deduction level to 20 percent, which added roughly $60 billion to the size of the tax cut. But Johnson continued holding out, and on Friday GOP aides suggested the deduction had been raised to 23 percent.
On Friday, Johnson confirmed that the change to 23 percent won his support for the bill, meaning that he and Daines were able to extract $114 billion in tax cuts for these firms in just a few days.
The tax cut package appeared to be sailing through the Senate until the Joint Committee on Taxation issued a report finding that even with economic growth the tax changes would add $1 trillion to the debt over 10 years. This emboldened Corker and Flake to dig in for more changes, particularly after they were told that a provision they had designed to limit the growth of the debt would not work.
Flake announced his support for the tax bill on Friday without Corker, and it remained uncertain what the Tennessee Republican planned to do.
Votes on the Senate tax package are expected later on Friday.
In addition to lowering tax rates for businesses, the Senate tax bill would temporarily cut tax rates for families and individuals until 2025.
But the bill would eliminate a number of tax benefits, including the current allowance for people to deduct state and local taxes from their federal taxable income. It would subject fewer people to the estate tax but stop short of eliminating the estate tax altogether.
The bill would also repeal the individual mandate from the Affordable Care Act, a major change that was added in recent weeks as part of a broader GOP effort to dismantle the Obama-era law. The individual mandate creates penalties for many Americans who don’t have health insurance.
The House of Representatives has already passed its version of the tax bill. If the Senate passes the bill, the leaders of the two chambers will need to resolve differences between the two bills before they can send it to President Trump for his signature. House Republican leaders have signaled they would like to start this process as soon as possible to pass the bill into law.
But the Senate’s parliamentarian told Corker on Thursday evening that there were issues with how the trigger would be designed. GOP leaders then had to decide whether to try to craft a new trigger or simply add new taxes back into the bill to lessen the impact on the debt.
The centerpiece of the GOP plan is a move to lower the corporate tax rate from 35 percent to 20 percent, starting in 2019. Trump has said he would not accept a corporate rate any higher than 20 percent, trying to establish a red line for negotiators.
Still more issues kept popping up. Sens. Marco Rubio (R-Fla.) and Mike Lee (R-Utah) were pushing hard for a change that would further expand the child tax credit for low-income families. To offset the cost of this expansion, they wanted to allow the corporate rate to move back up to 22 percent. Rubio and Lee had not publicly threatened to oppose the tax bill if their concerns weren’t met, but they persisted in pushing for the change. GOP leaders were searching Thursday evening for a way to accept some of their child tax credit changes but offset the cost with other changes to the tax code that did not include raising the tax rate.
https://www.washingtonpost.com/business/economy/johnson-to-back-senate-tax-bill-putting-gop-leaders-close-to-securing-passage/2017/12/01/0226ff98-d6a2-11e7-b62d-d9345ced896d_story.html?utm_term=.4e53972317b9
The Trump/GOP tax bill
that was before the Senate on Friday represents an historic transfer of wealth from the vast majority of Americans to the wealthiest few. But it may wind up better remembered historically as the 21st century version of the Kansas-Nebraska Act – which led inexorably to what might soon be remembered as America's First Civil War.
Thomas Jefferson himself recognized that the 1820 Missouri Compromise had set the country on a dangerous course by locking ideological and economic differences into an unbreakable geographic division. But the Kansas-Nebraska Act, in 1854, had the almost-immediate effect of destroying whatever remained of ideological agreement across state and sectional boundaries – rearranging the nation's politics into binary, competing geographic agglomerations (basically, as today, the Northeast and West Coast versus the South and southwestern prairies) with competing economic models and supporting ideological near-uniformity. The rest is history.
Political commentators are increasingly suggesting that we are in the midst of, or headed toward, another "civil war," metaphorically speaking. I'm not speaking metaphorically at all. This tax bill is not so much a tax bill as a declaration of war. A declaration of war on not just certain identifiable states but also their predominant ideology and economic model.
Let's start with the economic model. Unlike the usual tax bill that simply gets Christmas-treed up with presents for everyone, the GOP decided this year to hand out lumps of coal.
Who do Republicans now hate almost as much as the poor? The college-educated – especially professionals and those in the sciences. Their tax bill doesn't just eliminate the deductibility of interest payments on college loans – making college a little harder to attain for those of modest means – it actively attacks college endowments and makes taxable the tuition waivers most universities provide their graduate students, aiming pretty much to end the production of Ph.Ds in the United States.
Of course, we don't really need those if we don't intend to remain at the forefront of the new economy. And, apparently, we don't.
Just look at another element of the tax bill, the much ballyhooed conversion of our corporate taxes to a "territorial" system. What this means, in short, is that we'll now subsidize corporations to move their operations offshore; of course, they've basically done so already with manufacturing – now they'll have the same incentive as to white collar jobs. Why stick around in the U.S. anymore, anyway? There won't be any more of those needed scientists.
The only jobs that will stay here are those that have to – like resource extraction or waiting tables for the people who own resource extraction industries. There might be a few other service jobs that survive, but the tax bill also eliminates the deductibility of business expenses specifically for professional services firms, which will crater entrepreneurship, financial services, lawyers, doctors – you know, the U.S. economy. (We needn't even get into the simultaneous unraveling of net neutrality to kill off the innovation that made the new economy what it is to begin with.)
In case you don't get the drift yet, how about this comparison: Subsidies for the solar industry will be terminated early. But not because subsidies are anathema to conservatives: They're being added for oil drilling in the Arctic. And for beer brewers. It would be even more pointed if the beer subsidies were being funded by tax hikes on chardonnay growers – although the bill to aid disaster victims in Texas and Florida pointedly excludes all funding for the wine country in California devastated at about the same time by record wildfires.
Clearly, the economic agenda has begun to merge into a cultural one. And so the tax bill manages to work its way into several overtly cultural issues. It's simply not enough to grant tax-exempt status to churches that engage in conservative political activity; the bill tosses in a new tax-exempt status for "unborn children." And, for good measure, it repeals the individual mandate that's the centerpiece of Obamacare.
Perhaps this doesn't yet strike you as an intentional assault on everything that makes blue states "blue states." So there's even a provision in the bill to do that explicitly: the elimination of the deduction for state and local taxes, which is intended both to punish those states for choosing to pursue liberal policies like, oh, public education, and simultaneously to require them to pay more for the anti-government conservatives' dirty little secret – the federal government is really a mechanism by which the blue states subsidize the red ones. But the tax bill simultaneously undermines the foundations of the blue state economies – education, science, entrepreneurship, cleaner industries and a social safety net – that make this possible.
And that's where this scheme is likely to take its place alongside the Kansas-Nebraska Act as the codification of sectional divisions no longer bridgeable through normal politics.
Both sides of this increasingly-polarized divide see the other as trying to extirpate their way of life – and not inaccurately. Blue America spent the last eight years dictating both economic and cultural changes invalidating virtually every aspect of Red America. Liberals see all that as both righteous and benevolent – we're both promoting better values and willing to help train them to be more like us. Yes, and that's what the imperialists always say. Hence the Trump voters' uprising. And now they're getting back by imposing their values and destroying the arrogant elite's culture and economy.
But there's a major difference: The blue states actually pay for the red states and their chosen culture. Already, as I've noted before ( here and here), blue states are starting to go their own way. Once the effects of this new tax bill begin to be felt, they're going to start wondering a lot more openly why they're staying in a union like this. Republican leaders have been willing to turn a blind eye to Trump's proxy presidency for Vladimir Putin for the sole reason of pushing through this tax plan. Ironically, it's their tax plan that will do more to destroy America as we know it than any overt collaboration with Putin.
https://www.usnews.com/opinion/thomas-jefferson-street/articles/2017-12-01/gop-tax-bill-declares-war-on-blue-states?context=amp
GOP tax bill gains support; Senate leaders work on holdouts
WASHINGTON (AP) — Senate Republican leaders wrangled with the last few GOP holdouts Thursday as they pushed toward passing the first major rewrite of the nation’s tax code in more than three decades, a package that would impact rich and the poor as well as businesses big and small.
Senate Majority Leader Mitch McConnell, R-Ky., said he expected a final vote late Thursday or early Friday on a $1.4 trillion package that would slash the corporate tax rate, offer more modest cuts for families and individuals and eliminate several popular deductions.
Lawmakers would then try to reconcile the Senate package with one passed by the House in the hope of delivering a major legislative accomplishment to President Donald Trump by Christmas. Republicans have cast passage of a tax overhaul as a political imperative to ensure they hold their House and Senate majorities in next year’s midterm elections.
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“We’re heading down the homestretch,” McConnell told reporters on Thursday.
The package would add $1 trillion to the budget deficit over the next decade, much less than previously projected, according to a congressional analysis released Thursday.
The tax bill would increase economic growth, generating an additional $458 billion in tax revenue, according to the analysis by the nonpartisan Joint Committee on Taxation. The committee previously estimated that the package would add $1.4 trillion to the deficit.
The additional revenue is a boost to the bill but is still far short of the $2 trillion promised by Treasury Secretary Steven Mnuchin.
Two Republican senators, John McCain of Arizona and Lisa Murkowski of Alaska, announced their support for the tax package Thursday, giving it a major boost. Both McCain and Murkowski had voted against the GOP bill to dismantle the Obama health care law this past summer in a blow to the GOP.
Their support is key because Senate Republicans hold a slim 52-48 majority in the Senate, meaning they can only afford to lose two votes, with Vice President Mike Pence casting the tie-breaker.
“It’s clear this bill’s net effect on our economy would be positive,” McCain said in a statement. “This is not a perfect bill, but it is one that would deliver much-needed reform to our tax code, grow the economy, and help Americans keep more of their hard-earned money.”
Murkowski said she supports the tax bill now that it would allow oil drilling in Alaska’s Arctic National Wildlife Refuge. Murkowski got the provision added earlier this week, but the initial version violated arcane Senate rules about which provisions can be added to the tax bill.
Murkowski said Thursday the provision was tweaked to comply. “We have done it and we’re ready to go,” she said.
Drilling in the refuge has long been a contentious issue, pitting environmentalists against those who want to increase domestic oil production.
Senators were still grappling with several issues Thursday, including how to craft a trigger that would impose automatic tax increases if the tax package doesn’t raise as much revenue as projected. The provision would mollify deficit hawks who worry that the massive package of tax cuts for businesses and individuals would add too much to the nation’s mounting debt.
Sen. John Thune of South Dakota, the No. 3 Republican in the Senate, called the trigger “a work in progress” Thursday afternoon.
Senators were also considering whether to add a deduction for local property taxes. The current Senate bill completely eliminates the federal deduction for state and local taxes, a popular deduction in the Democratic-leaning states of New York, New Jersey, California and Illinois as well as many wealthy suburbs nationwide.
Sen. Susan Collins, R-Maine, proposed an amendment to let homeowners deduct up to $10,000 in local property taxes on the their federal returns. It is similar to a provision in the House-passed bill.
Without the deduction, Collins said, it would be “very problematic for me” to vote for the bill.
Collins would make up the estimated $146 billion in lost revenue by keeping the personal income tax rate for the wealthiest earners at 39.6 percent and make a smaller cut in the corporate tax rate. Trump and other Republicans insist that the corporate tax rate must be reduced from 35 percent to 20 percent.
Sen. Steve Daines, R-Mont., backed the package Wednesday after securing an increase in the deduction for business income from 17.4 percent to 20 percent. The deduction is for business owners who report their business income on their individual tax returns.
Sen. Ron Johnson, R-Wisc., has also been pushing to increase the tax break for these business owners. He has been noncommittal about his support, even with the change secured by Daines.
The tax package would mark the first time in 31 years that Congress has overhauled the tax code.
The plan would nearly double the standard deduction to around $12,000 for individuals and about $24,000 for married couples. The tax cuts for individuals would expire in 2026 while the corporate tax cuts would be permanent.
Under Senate rules, senators can offer unlimited amendments, setting up the possibility of dozens of votes that could stretch all night into Friday morning.
http://nbc4i.com/2017/11/30/gop-tax-bill-gains-support-senate-leaders-work-on-holdouts/amp/
GOP eyes post-tax-cut changes to welfare, Medicare and Social Security
High-ranking Republicans are hinting that, after their tax overhaul, the party intends to look at cutting spending on welfare, entitlement programs such as Social Security and Medicare, and other parts of the social safety net.
House Speaker Paul Ryan, R-Wis., said recently that he wants Republicans to focus in 2018 on reducing spending on government programs. Last month, President Trump said welfare reform will "take place right after taxes, very soon, very shortly after taxes," according to The Washington Examiner.
As Republicans advocate spending cuts, they have frequently cited a need to reduce the national deficit while growing the economy.
"You also have to bring spending under control. And not discretionary spending. That isn't the driver of our debt. The driver of our debt is the structure of Social Security and Medicare for future beneficiaries," Sen. Marco Rubio, R-Fla., said this week.
While whipping votes for a GOP tax bill on Thursday, Senate Finance Committee Chairman Orrin Hatch, R-Utah, attacked "liberal programs" for the poor and said Congress needed to stop wasting Americans' money.
"We're spending ourselves into bankruptcy," Hatch said. "Now, let's just be honest about it: We're in trouble. This country is in deep debt. You don't help the poor by not solving the problems of debt, and you don't help the poor by continually pushing more and more liberal programs through."
The GOP tax bill currently under consideration in the Senate would increase the federal deficit by nearly $1.5 trillion over a decade, according to Congress's official tax analysts and multiple other nonpartisan analysts. When economic growth the measure could create is included in the analysis, Congress's official tax scorekeeper predicted the bill would add $1 trillion to the deficit over 10 years.
Trump has not clarified which specific programs would be affected by the proposed "welfare reform."
During the presidential campaign, Trump vowed that there would be "no cuts" to Social Security, Medicare or Medicaid, although the president has reversed many of his economic campaign promises since taking office.
The remarks from leading Republicans have fueled a growing fear among liberals that the GOP will use higher deficits - in part caused by their tax bill - as a pretext to accomplish the long-held conservative policy objective of cutting government health-care and social-service spending, which the left believes would hit the poor the hardest.
"What's coming next is all too predictable: The deficit hawks will come flying back after this bill becomes law," said Sen. Ron Wyden, D-Ore., the ranking Democrat on the finance committee. "Republicans are already saying 'entitlement reform' and 'welfare reform' are next up on the docket. But nobody should be fooled - that's just code for attacks on Medicaid, on Medicare, on Social Security, on anti-hunger programs."
On the Senate floor Thursday night, Sen. Bernie Sanders, I-Vt., asked Rubio and Sen. Patrick Toomey, R-Pa., to promise that Republicans would not advance cuts to Medicare and Social Security after their tax bill. Toomey said that there was "no secret plan" to do so, while Rubio said he opposed cuts to either program for current beneficiaries. However, neither closed the door to changing the programs for future beneficiaries.
"I am not going to support any cuts to people who are on the program and need those benefits. But I want this program to survive," Toomey said. To which Sanders responded: "He just told you he's going to cut Social Security."
Many conservatives have long argued for cutting and changing social safety net programs, arguing that anti-poverty programs have failed and that Social Security spending is growing at an unsustainable rate.
Members of both parties have long been reticent to cut benefits, especially for seniors, due in part to the potential political cost of doing so. And in discussing changes, Republicans, including Rubio, have largely confined their ideas to plans that would affect new beneficiaries, rather than current ones.
Still, it may be particularly difficult for Republicans to push those measures ahead of the 2018 midterm elections, in which many in swing states and districts face well-funded Democratic challengers hoping to ride an anti-Trump wave into office.
http://www.chicagotribune.com/news/nationworld/ct-gop-welfare-medicare-social-security-cuts-20171201-story,amp.html
Small-business leaders tout GOP tax plan amid criticism
WASHINGTON — Small-business leaders flocked to the Capitol on Tuesday in support of the GOP tax plan despite criticism that the tax cuts favor corporations over smaller entrepreneurs.
Joined by Linda McMahon, head of the Small Business Administration, the heads of leading small business, retail and service organizations said they support the Senate GOP tax plan because it’s better than the current tax system.
“There’s no question that you are going to see more jobs and more economic growth,” said Juanita Duggan, president of the National Federation of Independent Business.
Matthew Shay, president of the National Retail Federation, acknowledged there will be tax differences based on the nature and structure of each business, but “we think on balance everyone is going to end up in about the same place.”
Small retailers are supportive because “it’s still better for them than what they’ve got now,” Shay told The Post in an interview.
Efforts are under way to make changes to the bill to get more GOP senators on board — including Sens. Ron Johnson (R-Wis.) and Steve Daines (R-Mont.).
They have expressed frustration that corporations get a better tax break than small businesses that file taxes as individuals, known as pass-through entities.
Under the Senate plan, corporate rates are being cut from 35 to 20 percent, while on the individual side, the highest rate would be 38.5 percent. Corporations could deduct state and local taxes as business expenses, whereas small business — like individuals — would lose that tax break under the Senate plan.
Eliminating the state and local tax deduction would hit hardest at high-tax states like New York, New Jersey and California.
One option to improve parity is to increase the amount pass-through businesses can deduct from 17.4 percent in the Senate plan to 20 percent. Small-business leaders said that while they accept the plan as is, they’d welcome any additions to level the playing field.
https://nypost.com/2017/11/28/small-business-leaders-tout-gop-tax-plan-amid-criticism/amp/
The GOP Tax Plan: What It Means For You
After multiple efforts to repeal and replace Obamacare failed, the GOP has one more major legislative achievement it’s hoping to pull off: Tax reform. The GOP’s tax reform bill has finally arrived, and it’s surprisingly lacking in ambition, which may spell doom before it even arrives on the floor. But if the bill does pass, prepare for a lot of misery come April as you try to sort through the sweeping changes.
Your taxes are getting much more complex. Much of what the GOP’s bill does is shift the burden onto the middle class. First, instead of seven tax brackets, the bill will shift to four: 12%, 25%, 35% and 39.4%. Currently, they’re 10%, 15%, 25%, 28%, 33%, 35% and 39.4%. The GOP hasn’t released the income ranges that will fall into these brackets, but it’s fairly safe to assume that some Americans will be getting a tax cut, some such as the poorest will be facing a tax increase, although supposedly the very poorest will not pay income tax at all, and the GOP is hoping to make up the difference by eliminating some deductions and increasing others.
The GOP wants to eliminate state tax deductions. At the moment, you can deduct property taxes, income taxes, and sales taxes, as well as local taxes, and that saves taxpayers $96 billion a year. This would affect taxpayers in every single state that charges any sort of tax at all, and will likely mean an increase in what you pay at the end of the year. While this would affect blue states heavily, it’d ding plenty of other states as well.
http://uproxx.com/news/what-is-gop-tax-plan-what-it-means/
Plan elements
The Act as of early November 2017 includes the following elements, among others, as reported by The New York Times:
Individual income tax rates
Reduces the number of marginal income tax rate brackets from seven to four. This has the effect of reducing taxes for most income levels. The income thresholds below apply to married couples filing jointly:
The top 39.6% bracket would be elevated to income greater than $1 million, rather than above $480,050 under current law.
The 35% bracket would apply to income from $260,000 to $1 million; the 33% bracket would be eliminated. This also has the effect of increasing the marginal rate applied to income between $260,000 and $424,950.
The 25% bracket would apply to income from $90,000 to $260,000; the 28% bracket would be eliminated.
A new 12% bracket would apply to income from $0 to $89,999; the 15% bracket would be eliminated.
Standard deduction and personal exemption
Changes to deductions and credits will impact families differently depending on the their particular circumstances.
Nearly double the standard deduction, from $6,350 to $12,700. About 70% of families choose the standard deduction rather than itemized deductions; this could rise to over 84% if doubled.
Eliminate the personal exemption, a deduction based on the number of taxpayers and dependents on a return.
Increase child tax credit from $1,000 to $1,600.
Property tax deductions[edit]
Mortgage interest deduction for newly purchased homes would be capped at $500,000, while the property tax deduction would be capped at $10,000. This would have more impact on taxpayers with more expensive property, generally those who live in higher-income areas.
State and local taxes[edit]
The deduction for state and local income tax and sales tax will be completely eliminated. Eliminating these deductions would increase taxes relatively more in states with higher taxes.
Other individual provisions[edit]
Repeal the Alternative minimum tax (AMT). The AMT primarily causes households earning between $200,000 to $1 million to pay more in taxes, so repealing it is a tax cut for higher-income persons.
Repeal the estate tax after six years. In the interim, the inherited wealth exempt from tax would be increased from $5.5 million to $11 million.
Pass-through businesses
Reduce the pass-through tax rate to 25% regardless of income level. Many businesses are incorporated as pass-through entities (e.g., sole proprietorships, partnerships, and S-corporations) meaning the owners pay taxes at individual rates. These represent 95% of businesses and most of corporate tax revenues, so this is a large tax cut for owners (i.e., capital as opposed to labor). Approximately the largest 2% of of pass-through businesses represent 40% of pass-through income and today are taxed at 39.6%, the top individual rate.
Corporate rates
The corporate tax rate would fall from 35% to 20% while eliminating most business deductions and credits. This change will bring the United States just below the average for advanced and larger economies.[16]
Miscellaneous tax provisions
The Senate version of the bill contains a variety of miscellaneous tax provisions, many advantaging particular special interests. Miscellaneous provisions include:
A tax break for citrus growers,allowing them to deduct the cost of replanting "citrus plants lost or damaged due to causes like freezing, natural disaster or disease."
The extension of "full expensing," a favorable tax treatment provision for film and television production companies, to 2022. The provision allows such companies "to write-off the full cost of their investments in the first year." The Joint Committee on Taxation estimates that the extension will lead to the loss of about $1 billion in federal revenue per year.
A provision ending a corporate tax exemption for certain international airlines with commercial flights to the United States (specifically, in cases where "the country where the foreign airline is headquartered doesn’t have a tax treaty with the U.S., and if major U.S. airliners make fewer than two weekly trips to that foreign country"). This provision is seen as likely to disadvantage Gulf airlines (such as Etihad, Emirates and Qatar Airways); major U.S. airlines have complained that the Gulf states provide unfair subsidies to those carriers.[18]
Reductions in excise taxes on alcohol for a two-year period.[19] The Senate bill would reduce the tax on "the first 60,000 barrels of beer produced domestically by small brewers" from $7 to $3.50 and would reduce the tax on the first 6 million barrels produced from $18 to $16 per barrel.[18] The Senate bill would also extend a tax credit on wine production to all wineries and would extend the credit to the producers and importers of sparkling wine as well.[17] These provisions were supported by the alcohol lobby, specifically the Beer Institute, Wine Institute, and Distilled Spirits Council.[19]
The bill passed by the House eliminates a tax deduction for teacher expenses.[20] The Senate bill, by contrast, would double the reduction, from $250 to $500.
Arctic National Wildlife Refuge drilling
In November 2017, the Senate Committee on Energy and Natural Resources passed legislation introduced by Republican Senator Lisa Murkowski that would require the Interior Department to lease 800,000 acres of land within the coastal plain area of the Arctic National Wildlife Refuge (ANWR) for oil and gas drilling. Republicans plan to fold this measure into the tax bill.[21][22] The move is part of the long-running Arctic Refuge drilling controversy; Republicans have attempted to allow drilling in ANWR almost 50 times, but thus far without success. The move was criticized by Democratsand environmentalist groups such as the Wilderness Society.
Repeal of Johnson Amendment
Included in the tax bill passed by the House is a provision that would repeal the Johnson Amendment, a 1954 law that disallows churches and other nonprofit groups from endorsing political candidates or engaging in other partisan political activities, enforceable by loss of nonprofit status.[23] The repeal has long been a key goal of the religious right, represented by groups such as the Family Research Council, Christian Coalition, Traditional Values Coalition, and Alliance Defending Freedom. Repeal is opposed by other religious leaders and organizations such as the United Methodist Church, National Council of Churches, and Baptist Joint Committee for Religious Liberty, which oppose blurring the distinction between charitable and political activities
The nonpartisan Joint Committee on Taxation estimated that repeal of the Johnson Amendment could result in the diversion of up to "$1.7 billion each year from traditional political committees to churches and other nonprofit groups that could legally engage in partisan politics for the first time."
Unlike the House bill, the Senate version of the bill does not currently include any modification to the Johnson Amendment.
https://en.wikipedia.org/wiki/Tax_Cuts_and_Jobs_Act_of_2017
Media Article:
THE GOP PLAN IS THE BIGGEST TAX INCREASE IN AMERICAN HISTORY, BY FAR
THE TAX BILL
moving its way through Congress is routinely referred to as a $1.5 trillion tax cut. And, in some ways, that’s true: on net, it would reduce the amount of taxes collected by the federal treasury by about $1.5 trillion over 10 years.
But that figure masks the eye-popping scale and audacity of the GOP’s rushed restructuring of the economy. Most immediately, the plan will take a large chunk out of state and local revenue that isn’t factored into that total. But more broadly, the bill cuts taxes by a full $6 trillion over a decade.
Senate Majority Leader Mitch McConnell, R-Ky., said Friday afternoon Senate Republicans have the votes to pass the plan, which gets referred to as only a $1.5 trillion cut because it raises $4.5 trillion in taxes elsewhere. But the key question is who gets a tax hike and who gets a tax cut. Put simply, the bulk of the tax cut is going toward the rich, while the tax increases go to everybody else.
And so the bill, properly described, is two things: the largest tax cut — and also the biggest tax increase — in American history.
Republicans have spent years describing the Affordable Care Act as the largest tax increase in U.S. history, ignoring the fact that the tax increases were balanced out by subsidies to pay for health coverage. In that respect, the ACA was a significant transfer of wealth from the top to the middle and bottom, which earned it the ire of the GOP. But all told, it raised less than $1 trillion in taxes over 10 years to pay for all that. The relative stinginess, in fact, is what fueled its unpopularity, as premiums and deductibles remained too high. But what Republicans lambasted as a historic tax hike represents just one-fifth of the tax increase of the new GOP bill.
Where’s that money going?
The Tax Policy Center estimated that about 80 percent of the benefit of the tax plan will go to the top 1 percent, who will enjoy the following elements of the tax cut:
A full $1.5 trillion alone is going to slash the corporate tax rate. CEOs have said repeatedly they plan to pocket that money rather than invest it or give workers higher wages.
The alternative minimum tax, paid almost exclusively by the rich, is also eliminated. That’s a $700 billion giveaway.
Another $150 billion goes to repealing the estate tax, which currently exempts the first $11 million of the deceased’s estate, so nobody even remotely middle class pays it. The repeal benefits so few people you can practically list them out.
More than $200 billion in cuts goes to a provision that allows a greater deduction for dividends on foreign earnings. That’s not for you.
Roughly $600 billion goes to reducing taxes on “pass-throughs” and other businesses not set up as corporations, which law firms, lobby shops, and doctors’ offices often benefit from. Poor and middle-class people do not tend to set themselves up as pass-throughs.
Under current law, many tax credits phase out at low-income thresholds. The GOP plan changes that by raising the threshold so richer people can also claim the credit. That provision alone is, by definition, a $200 billion tax cut for the wealthy.
Individual and family tax rates are cut by about $1 trillion, and some regular people will indeed see some of that money as a tax cut — but not much. As the New York Times noted, by 2027, people making between $40,000 and $50,000 would see a combined increase of $5.3 billion in taxes. Where would that money go? Folks earning more than $1 million would see their taxes collectively cut by $5.8 billion a year.
The list above brings the total well close to $5 trillion in tax cuts almost exclusively for the wealthy. The last major element of the bill, the doubling of the standard deduction, would benefit a broader range of people, but it comes at the expense of states, cities, and towns.
Where does the money to pay for all of this come from?
While Obamacare was a transfer of wealth from the top to the bottom, this bill sends money back the other way.
Even some of the ways the plan “raises” taxes on the rich wind up being a tax cut. Some $300 billion is raised by allowing companies who stashed profits offshore to repatriate it at a much lower rate. That repatriated cash will go straight to dividends for shareholders and stock buybacks — but it gets counted as a tax increase, which then allows the GOP to give an equal $300 billion cut on the other side of the ledger. It’s neat how that works.
The bill raises $1.6 trillion by repealing the personal exemption everybody gets on their tax returns. Getting rid of it across the board is extraordinarily regressive, since it gives the same benefit to the likes of Jared Kushner as it gives to people who have much less money than he does, so they’re hit much harder.
It raises another $1.3 trillion by going after deductions for state and local taxes, mortgage interest, charitable contributions, interest on student loans, medical expenses, teachers’ out-of-pocket expenses for paper and pencils for students, and a bunch of other nickel-and-diming of the middle class. No change drawer in the car, couch cushion, or plastic piggy bank is going untouched in the hunt for money to pay for the tax cut.
(The state and local deduction is effectively a subsidy for state and local spending on things like schools, roads, and police departments. Removing that will pressure states and cities to cut spending, so future teacher layoffs at your neighborhood school will be used to pay for the tax cuts, but because that happens at the state and local level, it isn’t factored into the Congressional Budget Office or Joint Committee on Taxation analyses.)
The plan gradually raises $128 billion in taxes by changing the way inflation is tabulated, so that your taxes slowly creep up over the years as the brackets come down.
And then, of course, the plan adds about $1.5 trillion to the debt over 10 years. That gets you most of the way to $6 trillion, with a handful of smaller tax hikes thrown in, some of which won’t obviously hurt the middle class. The domestic production deduction, a $96 billion boondoggle, is repealed, for instance, and $54 billion is saved by ending the credit for testing cures for rare diseases.
House Speaker Paul Ryan, R-Wis., went on NPR on Friday morning to try to defend the largest tax hike in American history.
“What does it say that — in practice according to independent analyses, I mean you do have winners and losers, not everybody gains, businesses gain, people with large estates to leave to their heirs gain, high-income people gain — but a lot of middle-income people do not gain in terms of money,” NPR’s Steve Inskeep said.
“I disagree with that. The average tax cut for a middle-class family is going to be $1,182,” Ryan responded.
Inskeep pushed back. “Lily Batchelder of New York University took some numbers from the Joint Committee of Taxation, bipartisan part of Congress as you know very well, and concluded that something like 100 million households in this country under the House bill, and even more under the Senate bill, would either get no tax cut or would get a tax increase,” Inskeep said. “Does that sound right to you?”
It didn’t sound right to Ryan.
“No, it doesn’t sound right unless it’s a person that’s not paying taxes already,” he said. “I think some people are cherry picking statistics.”
https://theintercept.com/2017/12/01/the-gop-plan-is-the-biggest-tax-increase-in-american-history-by-far/
McConnell says Senate has the votes to pass GOP tax bill
Senate Republicans said Friday that they had secured enough votes to pass a landmark $1.5 trillion tax package after making a few final deals to get wavering senators on board.
“We have the votes” Majority Leader Mitch McConnell (R-Ky.) told reporters after meeting with his caucus.
Almost simultaneously, Sen. Jeff Flake (R-Ariz.), a key holdout, announced his support for the legislation that delivers massive tax cuts to corporate America and the wealthy while bestowing mixed blessings on everybody else.
“I am pleased to announce I will vote in support of the tax reform bill,” Flake said in a statement. He said he had secured leadership support for priorities related to expensing and to a solution for immigrants brought illegally to this country as children.
Earlier Friday Sen. John Cornyn (R-Tex.) had told reporters that GOP leaders had enough votes to pass the tax package, expressing optimism after a night of high-stakes negotiations. We “have at least 50, and we’re still working,” Cornyn said.
The tax package still must clear several hurdles before it can become law. Once the Senate passes the bill, GOP leaders must reconcile differences between the Senate bill and a version that passed the House several weeks ago. They are optimistic they can do this, but a number of issues must be resolved, and there will be major implications for the taxes paid by families and individuals based on how those discussions go.
Securing the final few Senate votes forced GOP leaders to add more than $250 billion in tax cuts for individuals and businesses to their plan. To offset some of these costs, they had to abandon efforts to fully repeal the alternative minimum tax for individuals and companies, according to a brief summary of the changes that was shared with GOP members. Instead of fully repealing the AMT, they will now try to scale it back.
[Why it’s such a big deal the Senate tax bill would add $1 trillion to debt]
The AMT was put in place in the 1980s as a way to prevent wealthier Americans from using tax deductions to avoid paying taxes.
The comments from Cornyn, the second-ranking Republican in the Senate, came hours after Sen. Ron Johnson (R-Wis.) said he planned to back the bill. He was one of the last holdouts, though the GOP needed a little more help to ensure they had the 50 votes they needed.
During a tense standoff Thursday evening, Johnson and Flake joined Sen. Bob Corker (R-Tenn.) and threatened a last-minute objection to stop the tax bill from passing. This forced GOP leaders to scramble to try to accommodate some of their concerns.
orker and Flake had pushed for the possibility of hundreds of billions of dollars in tax cuts to be scaled back as a way to minimize the package’s impact on the government’s $20 trillion debt and had called for a “trigger” to kick in and raise taxes if economic growth estimates don’t pan out. The trigger was not among the concessions that Flake said he had extracted from GOP leaders in exchange for his support.
[Fact Checker: President Trump says the tax bill will ‘cost me a fortune.’ That’s false.]
As the Senate GOP meeting broke up on Friday, Sen. Ted Cruz (R-Tex.) told reporters that the bill would not include the tax increases. It’s the “right thing to do,” rather than “larding the bill up with additional taxes.” Cruz said.
Later in the day, Sen. James Lankford (R-Okla.) said there was nothing in the bill to accommodate those deficit concerns.
“I think it’s a stronger bill with a safety net ... but that’s not what we have,” ” Lankford said, noting the push to get the bill through Congress by the end of the year. “I’m going to be yes either way. It’s walking the tightrope with a net or without a net. You prefer to have a net, but I think it’s going to work.”
GOP leaders were also working to incorporate changes from Sen. Susan Collins (R-Maine), such as allowing Americans to deduct up to $10,000 in property taxes from federal taxable income. This change would save taxpayers $148 billion over 10 years compared with an initial version of the bill, according to the document circulated by Republican lawmakers Friday afternoon.
Cruz said that the bill would include Collins’s demand on the state and local tax deductions.
Collins later tweeted: “Delighted that the Senate has agreed to include my property tax deduction amendment, that will allow 166,000 Maine taxpayers who itemize to deduct a total of $725 million in property taxes each year.”
Key in securing Johnson’s support was a move by GOP leaders to expand tax cuts for millions of businesses, known as pass-throughs. These are companies that pass their income on to partners, owners, and investors, who in turn pay taxes on the earnings through the individual income tax portion of the tax code.
Senate GOP leaders had proposed allowing these investors to deduct 17.4 percent of their income from their taxes and then pay taxes on the remaining income. Johnson and Sen. Steve Daines (R-Mont.) argued for days that this was not generous enough for these businesses, and GOP leaders reluctantly raised the deduction level to 20 percent, which added roughly $60 billion to the size of the tax cut. But Johnson continued holding out, and on Friday GOP aides suggested the deduction had been raised to 23 percent.
On Friday, Johnson confirmed that the change to 23 percent won his support for the bill, meaning that he and Daines were able to extract $114 billion in tax cuts for these firms in just a few days.
The tax cut package appeared to be sailing through the Senate until the Joint Committee on Taxation issued a report finding that even with economic growth the tax changes would add $1 trillion to the debt over 10 years. This emboldened Corker and Flake to dig in for more changes, particularly after they were told that a provision they had designed to limit the growth of the debt would not work.
Flake announced his support for the tax bill on Friday without Corker, and it remained uncertain what the Tennessee Republican planned to do.
Votes on the Senate tax package are expected later on Friday.
In addition to lowering tax rates for businesses, the Senate tax bill would temporarily cut tax rates for families and individuals until 2025.
But the bill would eliminate a number of tax benefits, including the current allowance for people to deduct state and local taxes from their federal taxable income. It would subject fewer people to the estate tax but stop short of eliminating the estate tax altogether.
The bill would also repeal the individual mandate from the Affordable Care Act, a major change that was added in recent weeks as part of a broader GOP effort to dismantle the Obama-era law. The individual mandate creates penalties for many Americans who don’t have health insurance.
The House of Representatives has already passed its version of the tax bill. If the Senate passes the bill, the leaders of the two chambers will need to resolve differences between the two bills before they can send it to President Trump for his signature. House Republican leaders have signaled they would like to start this process as soon as possible to pass the bill into law.
But the Senate’s parliamentarian told Corker on Thursday evening that there were issues with how the trigger would be designed. GOP leaders then had to decide whether to try to craft a new trigger or simply add new taxes back into the bill to lessen the impact on the debt.
The centerpiece of the GOP plan is a move to lower the corporate tax rate from 35 percent to 20 percent, starting in 2019. Trump has said he would not accept a corporate rate any higher than 20 percent, trying to establish a red line for negotiators.
Still more issues kept popping up. Sens. Marco Rubio (R-Fla.) and Mike Lee (R-Utah) were pushing hard for a change that would further expand the child tax credit for low-income families. To offset the cost of this expansion, they wanted to allow the corporate rate to move back up to 22 percent. Rubio and Lee had not publicly threatened to oppose the tax bill if their concerns weren’t met, but they persisted in pushing for the change. GOP leaders were searching Thursday evening for a way to accept some of their child tax credit changes but offset the cost with other changes to the tax code that did not include raising the tax rate.
https://www.washingtonpost.com/business/economy/johnson-to-back-senate-tax-bill-putting-gop-leaders-close-to-securing-passage/2017/12/01/0226ff98-d6a2-11e7-b62d-d9345ced896d_story.html?utm_term=.4e53972317b9
The Trump/GOP tax bill
that was before the Senate on Friday represents an historic transfer of wealth from the vast majority of Americans to the wealthiest few. But it may wind up better remembered historically as the 21st century version of the Kansas-Nebraska Act – which led inexorably to what might soon be remembered as America's First Civil War.
Thomas Jefferson himself recognized that the 1820 Missouri Compromise had set the country on a dangerous course by locking ideological and economic differences into an unbreakable geographic division. But the Kansas-Nebraska Act, in 1854, had the almost-immediate effect of destroying whatever remained of ideological agreement across state and sectional boundaries – rearranging the nation's politics into binary, competing geographic agglomerations (basically, as today, the Northeast and West Coast versus the South and southwestern prairies) with competing economic models and supporting ideological near-uniformity. The rest is history.
Political commentators are increasingly suggesting that we are in the midst of, or headed toward, another "civil war," metaphorically speaking. I'm not speaking metaphorically at all. This tax bill is not so much a tax bill as a declaration of war. A declaration of war on not just certain identifiable states but also their predominant ideology and economic model.
Let's start with the economic model. Unlike the usual tax bill that simply gets Christmas-treed up with presents for everyone, the GOP decided this year to hand out lumps of coal.
Who do Republicans now hate almost as much as the poor? The college-educated – especially professionals and those in the sciences. Their tax bill doesn't just eliminate the deductibility of interest payments on college loans – making college a little harder to attain for those of modest means – it actively attacks college endowments and makes taxable the tuition waivers most universities provide their graduate students, aiming pretty much to end the production of Ph.Ds in the United States.
Of course, we don't really need those if we don't intend to remain at the forefront of the new economy. And, apparently, we don't.
Just look at another element of the tax bill, the much ballyhooed conversion of our corporate taxes to a "territorial" system. What this means, in short, is that we'll now subsidize corporations to move their operations offshore; of course, they've basically done so already with manufacturing – now they'll have the same incentive as to white collar jobs. Why stick around in the U.S. anymore, anyway? There won't be any more of those needed scientists.
The only jobs that will stay here are those that have to – like resource extraction or waiting tables for the people who own resource extraction industries. There might be a few other service jobs that survive, but the tax bill also eliminates the deductibility of business expenses specifically for professional services firms, which will crater entrepreneurship, financial services, lawyers, doctors – you know, the U.S. economy. (We needn't even get into the simultaneous unraveling of net neutrality to kill off the innovation that made the new economy what it is to begin with.)
In case you don't get the drift yet, how about this comparison: Subsidies for the solar industry will be terminated early. But not because subsidies are anathema to conservatives: They're being added for oil drilling in the Arctic. And for beer brewers. It would be even more pointed if the beer subsidies were being funded by tax hikes on chardonnay growers – although the bill to aid disaster victims in Texas and Florida pointedly excludes all funding for the wine country in California devastated at about the same time by record wildfires.
Clearly, the economic agenda has begun to merge into a cultural one. And so the tax bill manages to work its way into several overtly cultural issues. It's simply not enough to grant tax-exempt status to churches that engage in conservative political activity; the bill tosses in a new tax-exempt status for "unborn children." And, for good measure, it repeals the individual mandate that's the centerpiece of Obamacare.
Perhaps this doesn't yet strike you as an intentional assault on everything that makes blue states "blue states." So there's even a provision in the bill to do that explicitly: the elimination of the deduction for state and local taxes, which is intended both to punish those states for choosing to pursue liberal policies like, oh, public education, and simultaneously to require them to pay more for the anti-government conservatives' dirty little secret – the federal government is really a mechanism by which the blue states subsidize the red ones. But the tax bill simultaneously undermines the foundations of the blue state economies – education, science, entrepreneurship, cleaner industries and a social safety net – that make this possible.
And that's where this scheme is likely to take its place alongside the Kansas-Nebraska Act as the codification of sectional divisions no longer bridgeable through normal politics.
Both sides of this increasingly-polarized divide see the other as trying to extirpate their way of life – and not inaccurately. Blue America spent the last eight years dictating both economic and cultural changes invalidating virtually every aspect of Red America. Liberals see all that as both righteous and benevolent – we're both promoting better values and willing to help train them to be more like us. Yes, and that's what the imperialists always say. Hence the Trump voters' uprising. And now they're getting back by imposing their values and destroying the arrogant elite's culture and economy.
But there's a major difference: The blue states actually pay for the red states and their chosen culture. Already, as I've noted before ( here and here), blue states are starting to go their own way. Once the effects of this new tax bill begin to be felt, they're going to start wondering a lot more openly why they're staying in a union like this. Republican leaders have been willing to turn a blind eye to Trump's proxy presidency for Vladimir Putin for the sole reason of pushing through this tax plan. Ironically, it's their tax plan that will do more to destroy America as we know it than any overt collaboration with Putin.
https://www.usnews.com/opinion/thomas-jefferson-street/articles/2017-12-01/gop-tax-bill-declares-war-on-blue-states?context=amp
GOP tax bill gains support; Senate leaders work on holdouts
WASHINGTON (AP) — Senate Republican leaders wrangled with the last few GOP holdouts Thursday as they pushed toward passing the first major rewrite of the nation’s tax code in more than three decades, a package that would impact rich and the poor as well as businesses big and small.
Senate Majority Leader Mitch McConnell, R-Ky., said he expected a final vote late Thursday or early Friday on a $1.4 trillion package that would slash the corporate tax rate, offer more modest cuts for families and individuals and eliminate several popular deductions.
Lawmakers would then try to reconcile the Senate package with one passed by the House in the hope of delivering a major legislative accomplishment to President Donald Trump by Christmas. Republicans have cast passage of a tax overhaul as a political imperative to ensure they hold their House and Senate majorities in next year’s midterm elections.
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“We’re heading down the homestretch,” McConnell told reporters on Thursday.
The package would add $1 trillion to the budget deficit over the next decade, much less than previously projected, according to a congressional analysis released Thursday.
The tax bill would increase economic growth, generating an additional $458 billion in tax revenue, according to the analysis by the nonpartisan Joint Committee on Taxation. The committee previously estimated that the package would add $1.4 trillion to the deficit.
The additional revenue is a boost to the bill but is still far short of the $2 trillion promised by Treasury Secretary Steven Mnuchin.
Two Republican senators, John McCain of Arizona and Lisa Murkowski of Alaska, announced their support for the tax package Thursday, giving it a major boost. Both McCain and Murkowski had voted against the GOP bill to dismantle the Obama health care law this past summer in a blow to the GOP.
Their support is key because Senate Republicans hold a slim 52-48 majority in the Senate, meaning they can only afford to lose two votes, with Vice President Mike Pence casting the tie-breaker.
“It’s clear this bill’s net effect on our economy would be positive,” McCain said in a statement. “This is not a perfect bill, but it is one that would deliver much-needed reform to our tax code, grow the economy, and help Americans keep more of their hard-earned money.”
Murkowski said she supports the tax bill now that it would allow oil drilling in Alaska’s Arctic National Wildlife Refuge. Murkowski got the provision added earlier this week, but the initial version violated arcane Senate rules about which provisions can be added to the tax bill.
Murkowski said Thursday the provision was tweaked to comply. “We have done it and we’re ready to go,” she said.
Drilling in the refuge has long been a contentious issue, pitting environmentalists against those who want to increase domestic oil production.
Senators were still grappling with several issues Thursday, including how to craft a trigger that would impose automatic tax increases if the tax package doesn’t raise as much revenue as projected. The provision would mollify deficit hawks who worry that the massive package of tax cuts for businesses and individuals would add too much to the nation’s mounting debt.
Sen. John Thune of South Dakota, the No. 3 Republican in the Senate, called the trigger “a work in progress” Thursday afternoon.
Senators were also considering whether to add a deduction for local property taxes. The current Senate bill completely eliminates the federal deduction for state and local taxes, a popular deduction in the Democratic-leaning states of New York, New Jersey, California and Illinois as well as many wealthy suburbs nationwide.
Sen. Susan Collins, R-Maine, proposed an amendment to let homeowners deduct up to $10,000 in local property taxes on the their federal returns. It is similar to a provision in the House-passed bill.
Without the deduction, Collins said, it would be “very problematic for me” to vote for the bill.
Collins would make up the estimated $146 billion in lost revenue by keeping the personal income tax rate for the wealthiest earners at 39.6 percent and make a smaller cut in the corporate tax rate. Trump and other Republicans insist that the corporate tax rate must be reduced from 35 percent to 20 percent.
Sen. Steve Daines, R-Mont., backed the package Wednesday after securing an increase in the deduction for business income from 17.4 percent to 20 percent. The deduction is for business owners who report their business income on their individual tax returns.
Sen. Ron Johnson, R-Wisc., has also been pushing to increase the tax break for these business owners. He has been noncommittal about his support, even with the change secured by Daines.
The tax package would mark the first time in 31 years that Congress has overhauled the tax code.
The plan would nearly double the standard deduction to around $12,000 for individuals and about $24,000 for married couples. The tax cuts for individuals would expire in 2026 while the corporate tax cuts would be permanent.
Under Senate rules, senators can offer unlimited amendments, setting up the possibility of dozens of votes that could stretch all night into Friday morning.
http://nbc4i.com/2017/11/30/gop-tax-bill-gains-support-senate-leaders-work-on-holdouts/amp/
GOP eyes post-tax-cut changes to welfare, Medicare and Social Security
High-ranking Republicans are hinting that, after their tax overhaul, the party intends to look at cutting spending on welfare, entitlement programs such as Social Security and Medicare, and other parts of the social safety net.
House Speaker Paul Ryan, R-Wis., said recently that he wants Republicans to focus in 2018 on reducing spending on government programs. Last month, President Trump said welfare reform will "take place right after taxes, very soon, very shortly after taxes," according to The Washington Examiner.
As Republicans advocate spending cuts, they have frequently cited a need to reduce the national deficit while growing the economy.
"You also have to bring spending under control. And not discretionary spending. That isn't the driver of our debt. The driver of our debt is the structure of Social Security and Medicare for future beneficiaries," Sen. Marco Rubio, R-Fla., said this week.
While whipping votes for a GOP tax bill on Thursday, Senate Finance Committee Chairman Orrin Hatch, R-Utah, attacked "liberal programs" for the poor and said Congress needed to stop wasting Americans' money.
"We're spending ourselves into bankruptcy," Hatch said. "Now, let's just be honest about it: We're in trouble. This country is in deep debt. You don't help the poor by not solving the problems of debt, and you don't help the poor by continually pushing more and more liberal programs through."
The GOP tax bill currently under consideration in the Senate would increase the federal deficit by nearly $1.5 trillion over a decade, according to Congress's official tax analysts and multiple other nonpartisan analysts. When economic growth the measure could create is included in the analysis, Congress's official tax scorekeeper predicted the bill would add $1 trillion to the deficit over 10 years.
Trump has not clarified which specific programs would be affected by the proposed "welfare reform."
During the presidential campaign, Trump vowed that there would be "no cuts" to Social Security, Medicare or Medicaid, although the president has reversed many of his economic campaign promises since taking office.
The remarks from leading Republicans have fueled a growing fear among liberals that the GOP will use higher deficits - in part caused by their tax bill - as a pretext to accomplish the long-held conservative policy objective of cutting government health-care and social-service spending, which the left believes would hit the poor the hardest.
"What's coming next is all too predictable: The deficit hawks will come flying back after this bill becomes law," said Sen. Ron Wyden, D-Ore., the ranking Democrat on the finance committee. "Republicans are already saying 'entitlement reform' and 'welfare reform' are next up on the docket. But nobody should be fooled - that's just code for attacks on Medicaid, on Medicare, on Social Security, on anti-hunger programs."
On the Senate floor Thursday night, Sen. Bernie Sanders, I-Vt., asked Rubio and Sen. Patrick Toomey, R-Pa., to promise that Republicans would not advance cuts to Medicare and Social Security after their tax bill. Toomey said that there was "no secret plan" to do so, while Rubio said he opposed cuts to either program for current beneficiaries. However, neither closed the door to changing the programs for future beneficiaries.
"I am not going to support any cuts to people who are on the program and need those benefits. But I want this program to survive," Toomey said. To which Sanders responded: "He just told you he's going to cut Social Security."
Many conservatives have long argued for cutting and changing social safety net programs, arguing that anti-poverty programs have failed and that Social Security spending is growing at an unsustainable rate.
Members of both parties have long been reticent to cut benefits, especially for seniors, due in part to the potential political cost of doing so. And in discussing changes, Republicans, including Rubio, have largely confined their ideas to plans that would affect new beneficiaries, rather than current ones.
Still, it may be particularly difficult for Republicans to push those measures ahead of the 2018 midterm elections, in which many in swing states and districts face well-funded Democratic challengers hoping to ride an anti-Trump wave into office.
http://www.chicagotribune.com/news/nationworld/ct-gop-welfare-medicare-social-security-cuts-20171201-story,amp.html
Small-business leaders tout GOP tax plan amid criticism
WASHINGTON — Small-business leaders flocked to the Capitol on Tuesday in support of the GOP tax plan despite criticism that the tax cuts favor corporations over smaller entrepreneurs.
Joined by Linda McMahon, head of the Small Business Administration, the heads of leading small business, retail and service organizations said they support the Senate GOP tax plan because it’s better than the current tax system.
“There’s no question that you are going to see more jobs and more economic growth,” said Juanita Duggan, president of the National Federation of Independent Business.
Matthew Shay, president of the National Retail Federation, acknowledged there will be tax differences based on the nature and structure of each business, but “we think on balance everyone is going to end up in about the same place.”
Small retailers are supportive because “it’s still better for them than what they’ve got now,” Shay told The Post in an interview.
Efforts are under way to make changes to the bill to get more GOP senators on board — including Sens. Ron Johnson (R-Wis.) and Steve Daines (R-Mont.).
They have expressed frustration that corporations get a better tax break than small businesses that file taxes as individuals, known as pass-through entities.
Under the Senate plan, corporate rates are being cut from 35 to 20 percent, while on the individual side, the highest rate would be 38.5 percent. Corporations could deduct state and local taxes as business expenses, whereas small business — like individuals — would lose that tax break under the Senate plan.
Eliminating the state and local tax deduction would hit hardest at high-tax states like New York, New Jersey and California.
One option to improve parity is to increase the amount pass-through businesses can deduct from 17.4 percent in the Senate plan to 20 percent. Small-business leaders said that while they accept the plan as is, they’d welcome any additions to level the playing field.
https://nypost.com/2017/11/28/small-business-leaders-tout-gop-tax-plan-amid-criticism/amp/
Senate passes GOP tax bill
The Senate passed its version of the GOP tax plan shortly before 2 am Saturday morning on a narrow, mostly party-line vote of 51-49. Bob Corker was the only Republican to vote against it (here's why). The final bill — released online around 9:30 pm Friday — included hundreds of billions of dollars of changes designed to win over holdouts like Susan Collins, Jeff Flake, Ron Johnson, and Steve Daines.
What to expect: This vote is a done deal now, but the final version of what might be America's next tax code isn't. The Senate will still have to negotiate a final version with the House, but even though there will be critical details to be worked out, it's hard to see the bill falling apart after it's gotten this far.
What will have to be sorted out on taxesThe Senate is about to pass its version of the GOP tax bill, but it still differs in some significant ways from the House version. That means the conference committee — which House aides unanimously insist is happening — will have real problems to resolve.
Be smart: A final tax bill isn't a done deal, but once members have put themselves on the record voting for the bill once, they're going to feel a lot of pressure to get to "yes" again.
Democrats tearing into GOP rush on tax planDemocratic senators are taking to Twitter with their outrage on how Republicans are moving ahead with a massive tax bill without sharing the final text so they can each read the bill. The main offenses, per the Democrats: scribbled changes and hundreds of pages they can't read through tonight.
Our thought bubble: Tweaks to legislative language during floor debate is nothing new, and Democrats are highlighting written edits to draft language. But though both parties have rushed legislation when they're in power, it's not normal for a bill of this magnitude to be voted on so soon after being released.
Bottom line: 51 Republican senators said they'd vote for the bill before they'd seen changes worth hundreds of billions of dollars.
Clinton and Sanders' campaign managers think GOP tax plan is good for DemsHillary Clinton and Bernie Sanders' former campaign managers, Robby Mook and Jeff Weaver, argue in a memo obtained by CNN that the GOP's effort to overhaul tax reform has given Democrats a "golden opportunity" to get ahead in "just about every demographic."
Why it matters: Senate Republicans are set to pass their tax bill later today, which would be a major legislative win for the GOP going into the 2018 midterm elections.https://www.axios.com/senate-passes-gop-tax-bill-2514196650.html
The Senate passed its version of the GOP tax plan shortly before 2 am Saturday morning on a narrow, mostly party-line vote of 51-49. Bob Corker was the only Republican to vote against it (here's why). The final bill — released online around 9:30 pm Friday — included hundreds of billions of dollars of changes designed to win over holdouts like Susan Collins, Jeff Flake, Ron Johnson, and Steve Daines.
What to expect: This vote is a done deal now, but the final version of what might be America's next tax code isn't. The Senate will still have to negotiate a final version with the House, but even though there will be critical details to be worked out, it's hard to see the bill falling apart after it's gotten this far.
What will have to be sorted out on taxesThe Senate is about to pass its version of the GOP tax bill, but it still differs in some significant ways from the House version. That means the conference committee — which House aides unanimously insist is happening — will have real problems to resolve.
Be smart: A final tax bill isn't a done deal, but once members have put themselves on the record voting for the bill once, they're going to feel a lot of pressure to get to "yes" again.
Democrats tearing into GOP rush on tax planDemocratic senators are taking to Twitter with their outrage on how Republicans are moving ahead with a massive tax bill without sharing the final text so they can each read the bill. The main offenses, per the Democrats: scribbled changes and hundreds of pages they can't read through tonight.
Our thought bubble: Tweaks to legislative language during floor debate is nothing new, and Democrats are highlighting written edits to draft language. But though both parties have rushed legislation when they're in power, it's not normal for a bill of this magnitude to be voted on so soon after being released.
Bottom line: 51 Republican senators said they'd vote for the bill before they'd seen changes worth hundreds of billions of dollars.
Clinton and Sanders' campaign managers think GOP tax plan is good for DemsHillary Clinton and Bernie Sanders' former campaign managers, Robby Mook and Jeff Weaver, argue in a memo obtained by CNN that the GOP's effort to overhaul tax reform has given Democrats a "golden opportunity" to get ahead in "just about every demographic."
Why it matters: Senate Republicans are set to pass their tax bill later today, which would be a major legislative win for the GOP going into the 2018 midterm elections.https://www.axios.com/senate-passes-gop-tax-bill-2514196650.html
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