TAX REFORM

[HairOfTheDog]

I support it.

The U.S. tax system needs to be simplified and more fair, in my opinion.

Tax reduction, however, should not be undertaken if it increases the debt and deficit-spending without solid evidence that job growth, wage growth, and increased consumer spending will improve economic performance enough to cover those liabilities in a reasonable time frame. I haven't seen that evidence yet.

Yesterday, the House approved the first tax reform bill in decades. It's a cause for celebration for Trump and the administration.

But, the Senate has a different tax reform draft and it's unclear if Republicans in the two houses can agree and get enough votes to pass a consolidated bill.

[HairOfTheDog]

Here's a tax reform summary chart (updated yesterday)


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[HairOfTheDog]

Here are the key differences between the two chambers of Congress in some more detail.

State and local taxes
The Senate bill will entirely repeal the deduction for state and local taxes, making no exception for property taxes.

The House bill, in a bid to win support from moderate Republicans, would allow deductions up to $10,000 for property taxes.

Senate Republicans see little need to allow property tax deductions, as they don’t have members in their conference from high-tax states such as California, New York, New Jersey and Illinois.

Home mortgage interest deduction
The Senate would keep in place the deduction for newly purchased homes up to $1 million while the House plan would cut the threshold to $500,000.

The House Ways and Means Committee added the lower cap on mortgage interest deductions as a last-minute revenue raiser and it drew strong opposition from the National Association of Home Builders, a powerful special interest group.

Sen. Tim Scott (R-S.C.), a member of the Finance Committee, pushed to raise the limit, arguing that homes priced between $500,000 and $1 million are average in high-income areas such as San Francisco, New York and the District of Columbia. (Thank you Tim!)

Popular tax credits and deductions
The Senate would keep in place a variety of popular tax credits and deductions that would have been eliminated by the House tax bill released last week.

It preserves tax credits and deductions for adoption, medical expense, teacher expenses and student loan interest.

“We stayed kind of inside the big structural issues,” said a Senate Finance Committee aide.

The House Ways and Means Committee on Thursday adopted an amendment to restore the adoption tax credit.

The Senate bill would also raise the income limit for the child credit. In the Senate bill, the child tax credit starts to phase out at $1 million of income for married couples, compared to $230,000 in the House bill. The credit is increased to $1,650 in the Senate bill and $1,600 in the House bill.

Tax brackets
The House bill would condense the number of tax brackets to four: 12 percent for income up to $90,000; 25 percent for income up to $260,000; 35 percent for income up to $1 million; and 39.6 percent for income over $1 million.

The Senate bill would establish seven tax brackets at 10 percent, 12 percent, 22.5 percent, 25 percent, 32.5 percent, 35 percent and 38.5 percent for the nation’s highest income earners.

The top rate kicks in for individuals who earn $500,000 and couples who earn $1 million.

Senate Republicans said they were concerned about the optics of changing the 10 percent bracket to 12 percent while cutting the corporate tax rate, even though low-income earners would be covered by the doubling of the standard deduction in both bills.

(continued)

[HairOfTheDog]

Estate tax
The Senate bill would double the estate-tax exemption for wealthy estates from $11 million to $22 million per couple (or from $5.5 million to $11 million per individual) while the House bill would repeal the estate tax entirely.

Moderate Sen. Susan Collins (R-Maine) last week said she opposed getting rid of the estate tax entirely.

Corporate tax rate
The Senate would cut the corporate tax rate to 20 percent, like the House would, but delay its implementation until 2019 to reduce the projected cost of the bill over ten years.

The House would cut the corporate tax rate next year.

Pass-through businesses
The Senate would establish a 17.4 percent deduction for pass-through businesses based on the Section 199 domestic manufacturing deduction that would lower the effective tax rate for small businesses in the top tax rate to slightly more than 30 percent, according to a Senate Finance Committee aide.

It would apply to certain domestic non-service pass-through income, according to the committee.

The House bill, by contrast, would establish a 25 percent rate for pass-through companies but would only make 30 percent of their revenue eligible for that rate and tax the other 70 percent as wages under the individual tax rate. That would result in a blended rate for many small businesses between 35 percent and 38 percent.

The National Federation of Independent Business (NFIB), which contributes money overwhelmingly in favor of GOP candidates, complained the House bill “leaves too many small businesses behind.”

On Thursday the group said, “We are very encouraged by the plan introduced by [Senate Finance Committee] Chairman [Orrin] Hatch [R-Utah.].” UPDATE: The House on Thursday adopted an amendment to provide additional relief to small businesses and won back the support of NFIB. It would create a new nine-percent tax rate for the first $75,000 of income of a married active owner who has less than $150,000 of pass-through income.

Source: http://thehill.com/policy/finance/359725...-house-tax-

[HairOfTheDog]

Will we have a new tax policy confirmed before Christmas, as President Trump has promised?

The Republicans really need to get something substantial passed considering the health care reform, Mexico-funded Wall, and other key campaign promises have not come to fruition. So, they're definitely motivated.

I don't mind tax reform that benefits the rich, so long as it benefits everyone else as much or more and doesn't increase income inequality in this country.

[Maggot]

Hopefully, this system needs simplification and we have to pass the bill to see whats in it away from the fog of the controversy.

[Duchess]

Those who own private jets can write them off. Teachers who buy supplies for their classrooms cannot write off the supplies.

[BigMark]

It's for work, why not?

[HairOfTheDog]

Hopefully, this system needs simplification and we have to pass the bill to see whats in it away from the fog of the controversy.

I don't understand that logic. No elected leader should vote to pass something before understanding its contents, especially a bill that affects every American citizen and business.

There is going to be controversy even without a fog because not everyone has the same priorities and some people benefit while others lose in the long run. That's life.

Personally, I'm not convinced that going back to trickle-down economics is a good idea at all. There is no evidence that giving businesses permanent tax cuts will result in greater investment and raising of employee wages. In fact, recently surveyed owners of large companies confirmed that they'll instead pay out more dividends.

And, giving individuals tax cuts for a few years and then having them raised above where they are now rubs me wrong. Officials have said, "no worries, the individual tax cuts will be extended when the time comes, trust us." I don't trust a promise that can't possibly be assured.

[HairOfTheDog]

I think Trump and company know that their proposal to repeal the Obamacare mandate and thus seriously reduce Medicare/Medicaid funding won't pass. It's a negotiating prop, in my opinion.

I can see a Trump tweet on the horizon, "Okay, okay, you've twisted our arms......we tried to repeal an element of Obamacare, but we'll take it out if you vote yes and let us keep that repeal of the estate tax, which doesn't benefit me, my heirs, and the uber rich at all."

That "it won't benefit me at all" bit Trump's peddling is a lie, of course. It would benefit the billionaire class bigly and virtually nobody else. That money could be much better spent on projects that benefit everyone; I hope the estate tax repeal is rejected.

The proposed SALT repeal would also really hurt people who are already contributing more to the tax pool than others. I hope that gets chopped from the final draft too.

[Blindgreed1]

Hopefully, this system needs simplification and we have to pass the bill to see whats in it away from the fog of the controversy.

[Maggot]

Hopefully, this system needs simplification and we have to pass the bill to see whats in it away from the fog of the controversy.

I'm glad someone gets it.

[HairOfTheDog]

Hopefully, this system needs simplification and we have to pass the bill to see whats in it away from the fog of the controversy.

I'm glad someone gets it.

I get it Nancy. ')

[HairOfTheDog]

On Tuesday 11/28, CNN will televise a townhall-style discussion and debate about Tax Reform.

I love these topical forums, very informative in getting perspective from all parties.

The participants will be a Democrat (Senator Maria Cantwell, WA), an Independent (Senator Bernie Sanders, Vermont ), and two Republicans (Senators Ted Cruz, TX and Tim Scott, S.C.).

[BigMark]

Oy vey, Bernie in my pocket Sanders.

[HairOfTheDog]

Oy vey, Bernie in my pocket Sanders.

You named your pocket penis stimulator 'Bernie Sanders'?



Let's be clear.........that's ratha funny. But, it's weirder than the weirdest 1% man.

[Maggot]

I've been looking at a yearly budget from Washington and cannot find anything except for this:

Budget

I'm hoping it passes

[HairOfTheDog]

I thought you were very strongly against debt increase and deficit spending Mags.

Seems a lot of Republicans who raged against it in the past are now supporting it too, essentially claiming trickle down economics will spur enough growth to make up for it. That doesn't seem realistic to me based on history and the lack of specific details/evidence to support that claim.

But, there are still enough deficit hawks in Congress to make it unclear whether the current tax reform and budget proposals can be passed before Christmas. I hope the current proposals fail.

From what I can tell.........they don't help everyone, put seniors and low-income earners in a worse place after a few years, and they benefit the extremely wealthy much more than others.

The Senate Budget Committee is set to vote on the Republican tax plan this afternoon, ahead of a floor vote this week. If they pass it, they'll need to reconcile the differences in the House plan to come up with a consolidated bill for vote.

The nonpartisan Congressional Budget Office (CBO) has projected that the GOP tax plan would increase the federal deficit by more than $1.4 trillion over the next decade and that it would hurt low-to-middle-income people and benefit the wealthy. https://www.cbsnews.com/news/senate-budg...-tax-plan/

[Duchess]

Seems a lot of Republicans who raged against it in the past are now supporting it too

Oh look, there's that pesky hypocrisy again.

[Maggot]

I thought you were very strongly against debt increase and deficit spending Mags.

I am and very much so, though 1 trillion is not something to spill on the floor 19 trillion is mopworthy. This tax bill still has a ways to go with more pork flying than a pig in a blender but as in anything sacrifices need to be made.

LINK

I believe tax reform is brutally needed and much of the talk about the bottom line on tax reform comes from the hate trump crowd. but i do admit I have not read the entire thing because its really not ready to read yet, it's unfinished as of today. So unless you have a crystal ball its all up in the air.

I hope the Obamacare tax gets shelved but that may be asking to much from the bleeding hearts.