Republicans Release Final Version Of Tax Bill, And It Appears Likely To Pass
The final version of the tax bill appears to be on track for passage, but the devil is in the details.
House and Senate negotiators released the final version of their tax bill late yesterday, and after several tweaks to satisfy wayward Republican Senators it appears to be on track to pass both chambers of Congress next week and head to the President’s desk before the Christmas break:
Republican lawmakers appeared to secure enough votes on Friday to pass the most sweeping tax overhaul in decades, putting them on the cusp of their first significant legislative victory as leaders geared up to pass a $1.5 trillion tax cut along party lines and send it to President Trump by Christmas.
A day after the bill’s prospects wavered somewhat, Republican leaders notched two victories on Friday, when Senator Marco Rubio of Florida said he would vote yes after gaining a more generous child tax credit in the final bill and Senator Bob Corker of Tennessee, who voted against the initial Senate bill over deficit concerns, said he would support the legislation. The bill also won praise from Senator Susan Collins of Maine, leaving it likely to pass with all 52 Senate Republicans in support.
The final legislation released by Republicans on Friday follows the broad strokes of the previous House and Senate bills, providing deep and longstanding tax cuts for businesses, including a corporate tax rate of 21 percent, down from the current 35 percent. The bill also provides temporary tax benefits for low- and middle-income Americans, including lower marginal tax rates, and a new top tax rate of 37 percent for the wealthiest Americans, down from 39.6 percent. All of the individual tax breaks will expire at the end of 2025.
The final bill does build back in some of the prized tax breaks that had been slated for elimination in the House legislation, including the deduction for high out-of-pocket medical costs, tax-free tuition waivers for graduate students and the ability to deduct interest on student loans. But it also includes new limits on other popular tax breaks, including the mortgage interest deduction and the state and local tax deduction.
In a pre-emptive move against accounting maneuvers in high-tax states such as New York and California, the bill prohibits taxpayers from prepaying next year’s state and local income or property taxes, in order to deduct them from 2018 taxes. That form of tax planning would have allowed taxpayers to benefit more from the full state and local deduction this year before it is capped next year.
The bill also includes changes large and small to appease business lobbyists and their congressional champions, such as additional tax relief for the owners of engineering and architectural firms and the elimination of a change in capital gains treatment of homes sales — a key priority for the real estate industry.
One of the biggest changes came on Friday, when lawmakers agreed to a demand by Mr. Rubio to expand the child tax credit by allowing families who owe no federal income taxes to still claim up to $1,400 of the $2,000 child tax credit, up from $1,100 in the original version. But that change was offset by limiting the bill’s benefits to some higher-income families, and by restricting it to children age 16 and below, down from 17 and below in the Senate bill. The net result was a credit that is more lucrative for lower-income earners but actually slightly less costly than the Senate bill.
Republicans must stay within a $1.5 trillion limit that lawmakers have allowed on the amount the bill can add to federal deficits if they want to pass it without Democratic support.
The bill’s price tag had been a sticking point for one senator, Mr. Corker, a longtime deficit hawk, who voted against the initial Senate bill over concerns it would add to the federal debt. But on Friday, he said he was swayed to support the bill despite its cost. The congressional Joint Committee on Taxation analysis showed the Senate plan would add $1 trillion to the federal budget deficit.
“This bill is far from perfect, and left to my own accord, we would have reached bipartisan consensus on legislation that avoided any chance of adding to the deficit, and far less would have been done on the individual side with items that do not generate economic growth,” he said.
In a tweet on Friday, Mr. Rubio called the Senate’s inclusion of the expanded credit “a solid step,” and a spokeswoman said he would now vote for the bill.
The bill’s text, which was signed by Republican negotiators from the chambers’ conference committee on Friday, includes few major changes from the version that passed the Senate this month. The 2025 expiration date for the individual tax cuts remains, as does the estate tax, which would apply to fewer Americans down the road. At the center of the $1.5 trillion bill are large tax cuts for corporations and other businesses, which Republican lawmakers say will create jobs, investment and economic growth.
Compared with the Senate bill, the revised legislation would lower some thresholds for entering a higher individual marginal tax bracket. For example, the top bracket for a married couple filing jointly would begin at $600,000 a year, down from $1 million in the Senate bill.
Owners of so-called pass-through businesses, who pay taxes on their profits at the owner’s individual tax rate, would receive a slightly less generous tax break than the Senate- and House-passed bills called for, allowing a 20 percent deduction on profits they earn. That deduction would phase out — with some exceptions — starting at $315,000 of income for couples. The Senate bill included a larger deduction, 23 percent, and a higher phaseout point, $500,000 for couples.
Two newly revealed changes on the business side would help offset revenue losses: a provision that limits corporations’ deductions of their net operating losses to 80 percent of their income starting next year, instead of in 2023 as the Senate bill called for, and one that would effectively reduce the annual value of research and development tax breaks starting in 2022. Those changes combined to raise an additional $100 billion.
You can read a summary of the details of the bill at The New York Times, but as noted above, the final reservation largely resembles the package that passed the Senate earlier this month. The major changes appear to be with respect to the child care tax credit, which was a major sticking point for Florida Senator Marco Rubio among others, Beyond that, the details of the bill haven’t changed significantly, and one presumes that there wouldn’t be much change to the estimate from the Congressional Budget Office and other entities that the bill would add up to $1.5 trillion to the deficit over the course of the next ten years. Additionally, it would likely not change the estimates that the majority of the benefits of the bill would inure to corporations and to upper-income groups rather than the middle-class as has been represented by the Trump Administration and Congressional and Senate Republicans have claimed. On the bright side for pretty much all taxpayers is the increase in the standard deduction to $12,000 for singles and $24,000 for married couples, a change which among other things will mean that fewer people will end up itemizing their deductions, something that may offset some of the limitations placed on things such as the deduction for state and local taxes and the changes that will be made regarding the deductibility of medical expenses.
Looking at the numbers on Capitol Hill, while there are still some uncertainties, it seems likely that in the end, the bill will have the votes it needs to pass both chambers of Congress relatively easily. In the House, there doesn’t appear to be any significant opposition to the bill and it’s likely that the measure will pass just as easily as the House version did back in November. In the Senate, things are still somewhat up in the air, but it seems likely that the bill will pass there even though there are still a handful of undecided Senators and other factors that could have an impact on the final vote. As noted above, the two major hurdles for Senate Majority Leader Mitch McConnell were Senators Marco Rubio and Bob Corker. Rubio appears to be satisfied enough with the changes to the child care tax credit to vote for the bill, and Corker announced his intention to vote for the tax bill after negotiators agreed to make changes to the treatment of real estate LLCs, which just happen to be a major investment in Corker’s personal portfolio. At the moment, Senators Mike Lee, Jeff Flake, and Susan Collins have not announced their position on the bill, but the fact that they all voted for the Senate tax bill earlier this month seems like a strong indication that they will end up supporting the final version of the bill. Outside of those three Senators, the health status of two Senators could complicate things for McConnell as well. Mississippi Senator Thad Cochran is currently back home dealing with the aftermath of outpatient surgery for a non-cancerous skin lesion, and Senator John McCain remains hospitalized at Walter Reed Army Hospital to deal with complications resulting for his treatment for brain cancer and is being described by colleagues as “increasingly frail.” If the other three Senators are on board with the bill, this would mean that McConnell would need to rely on Vice-President Pence to cast his tie-breaking vote to pass the bill if Cochran and McCain cannot be present to vote.
As a political matter, passing this tax bill will give Republicans the major legislative victory that has eluded them all year, but it’s unclear whether that will end up benefiting them politically speaking. As it has over the past two months, polling shows that the American public does not support the tax bill and many Americans doubt that it will benefit them financially in the coming years or that it will provide the boost to the economy that Republicans on Capitol Hill and the Trump Administration claim that it will. No doubt, this issue will become a significant one in the run-up to the 2018 midterms. Democrats will argue that the bill largely benefits corporation and top income earners, while Republicans will argue that it will benefit all tax payers and that it will boost the economy. As it stands, though, it’s unlikely that any of these questions will be objectively answered between now and the election, especially since most of the impact of the bill won’t be felt for several years.
A stupid, reckless bill that has no purpose whatsoever but to shovel money to big corporations while further damaging the working class. An appalling act of servility to big money.
The upside is that California will hunt down and eliminate the last Republicans in the state. There are 14 now, there’ll be far fewer come 2018.
These questions were answered, objectively, at least twice in the past 35 years.
I heard the head of the Log Cabin Conservatives recently objecting to the use of the term “Trickle Down Economics” recently. Not because that’s not what this is, but because no one is buying that phrase anymore.
“We Have to Pass the Bill So That You Can Find Out What Is In It away from the fog of the controversy”
@JKB: What’s funny is that out-of-context soundbite doesn’t mean what the Republicans claim it does when it’s applied to the ACA, but is entirely valid when applied to their tax scam bill.
meh
Once the tax bill is signed, the GOP will be done with he orange menace. The GOP’s naked power grabs will be quite temporary, as everyone is watching. Most elected officials cut their teeth in the quaint age of newspapers and have no real clue how modern information systems function. Ramming it through absent any Democratic support makes it that much easier to undo, as the public hates it.
What is Mueller going to discuss next week with man-baby’s lawyers?
@michael reynolds:
It was pointed out that states like California and New York can get around the SALT limitations by replacing income taxes with payroll taxes, which are paid by the employer and still fully deductible:
Now that state income taxes aren’t going to be deductible, will states switch to payroll taxes?
So the math on how much this ends up costing assumes that when the Republicans screw over California and New York taxpayers, they just sit there and allow themselves to be screwed over.
@Stormy Dragon:
In time for 2018? Nope. Will California voters be screwed? Yep.
Issa is dead man walking. So is Kevin McCarthy. We will purge this state and New York state of Republicans. We’re going to take the House and the Senate, too, and that will be an end to Trump and the Trumplican party.
Even though the individual tax rates won’t apply to last year’s income, I all but guarantee you that in the next couple of months between now and April Trump supporters will take to the internet to brag about how much less they paid this year than in the past 8 years. On the whole, when it comes to energizing the base, passing this is almost certainly better than not passing anything. Actual facts do not matter much (if at all) to Donald Trump’s base.
I do have a thought about the expiring middle class tax cuts though. High income earners better enjoy these next couple of years, as Democrats are likely to be in control of government when these middle class tax cuts are due to expire, and when it comes to how to pay for keeping the lower rates “raise the top rates back up” will be a fairly easy response … especially when/if we haven’t seen the “tremendous” economic growth by then. Raising corporate tax rates would be a harder trick … unless maybe to “pay for” something like single payer healthcare. But one way or another, it seems that Republicans have pretty much sold the farm (in the naked way they couldn’t even pretend this bill wasn’t purely for their donor class) for what will likely be a relatively short term win.
@Todd:
Lowering the corporate tax rate in exchange for a higher personal tax rate would not be a bad outcome (although if I was king of universe, I’d lower the corporate tax rate and offset it by treating capital gains and dividends as normal income (which has the added bonus of also closing the carried interest loophole) ).
My problem with this bill isn’t lowering the corporate rate per se, but rather lowering it in a way that’s not revenue neutral and on the backs of the middle class rather than the people who benefit most from the change.
I sincerely hope that a few liberal purists have again been brutally reminded – by way of a no-hearings Soviet-style creation and approval of this massive reallocation of tax resources from the working middle and even upper middle class tax payers to the very wealthiest Americans – that both parties are NOT the same.
Does anyone on the liberal or left actually believe that a Democrat would have cooperated with this Republican congress to pass this kind of a tax bill?
@michael reynolds:
Cool! When you finish with that, maybe build some housing.
@al-Ameda:
No, but count me as one who thinks that Democrats should have “cooperated” to pass the tax reform bill. We might have gotten something out of it.
@al-Ameda:
But Obamacare was so fast!
If I ignore the fact that it took ten months and that there was hearing after hearing after hearing, and that there was a special measure taken to to ally with Republican lawmakers and to elicit their feedback, and amendments were offered to allay those constructive concerns.
If I ignore the fact that the individual mandate was borrowed from a Republican plan as an alternative to single-payer to avoid the free-rider issue.
If I ignore all that, this is *exactly* like Obamacare.
@JKB:
“We Have to Pass the Bill So That You Can Find Out What Is In It away from the fog of the controversy”
Good lord, do you have no shame? There’s video of Pelosi’s speech. You can try to make her full statement disappear and make it seem like she just said “We Have to Pass the Bill So That You Can Find Out What Is In It.” But clearly that is not what she was saying.
And here come’s the icky part – you already knew that but you choose to employ it as a debate tactic anyway. Because scoring points is more important than telling the truth in your head.
That is disgusting. You are disgusting.
@Stormy Dragon:
I agree with you about corporate taxes and offsetting them – that would be a much preferable alternative.
I’m not so sure the cuts will be on the backs of the middle class however. It looks to me like this will be a big cut for many in the middle class thanks to a doubled standard deduction and child tax credit. For working families with wage income this should be a significant decrease in taxes.
For me personally, married with 3 kids and earning somewhat below the national median in wage income, I’ll actually have a slightly negative federal income tax rate (zero taxes owed and about $1000 in free money thanks to the refundable portion of the child tax credit). With three kids I wouldn’t actually start paying any federal taxes until close to $80k in income.
The standard deduction increase will also help middle-income people who rent compared with those who own homes.
There are other problems with this bill, not least the way in which is was passed, but I’m not yet convinced it will hurt the middle class.
@James Pearce: No, but count me as one who thinks that Democrats should have “cooperated” to pass the tax reform bill. We might have gotten something out of it.
The Republicans did not want any input from the Democrats. They really didn’t want any input from Republicans, except for making some changes to get the 50 votes. There were no substantive hearings on the bill, they just wanted the 50 votes. This coming from a party that bitched for years about how Obamacare was passed. Obamacare passed with 60 votes in the Senate, and there was a real attempt to work on a bipartisan basis early on with the “Gang of Six”. Contrast this with the current tax bill where they had hand written unintelligible notes scrawled in the margins. The GOP has shown no interest in bi-partisan legislation for years, whether they are in or out of power,
@Andy: It will hurt the middle class because the GOP has already signalled their willingness to go after SS and medicare in 2018 because of concerns about the deficit. Ultimately, the corporate jet deduction contained in the tax bill will be on the backs of the middle class.
Or something more specific like removing the $250 deduction for teachers paying for school supplies out of their own pocket, while at the same time making it easier for the wealthy to send their kids to private school.
@Senyordave:
I know I live in Fantasyland and am kind of alone on this, but I can imagine a Democratic coalition with fewer whiners and more elbows.
I will be taking a close look at the fine print. And the large print.
I will also see what Forbes and John Layfield have to add about it (see John’s financial comments on Twitter).
@James Pearce: You can’t force a compromise when the party in power sees no reason to compromise. They can throw every damn elbow they want, McConnell and Ryan told their donors they would get a tax cut and they will deliver. major tax reform with almost no discussion and a bill that was barely finished as they were voting on it.
@al-Ameda:
I share your sentiment, I really do hope that this is a lesson our (mostly) young progressive friends take away from recent events in AL and VA … when turnout is good, Dems can win, and when they stay home, there are real consequences.
That being said, when it comes to 2016, it’s not hard to imagine a scenario where someone other than Hillary Clinton (Joe Biden perhaps) was nominated to run against Donald Trump, and not only would Democrats have the White House right now, but they’d probably also control the Senate (WI and PA were seats the Dems lost almost totally on Clinton’s negative coattails … and with a better candidate at the top of the ticket they might have also won NC). 50-50 or even 51-49 Dem majority was entirely possible.
Hindsight is 20/20, and we’ve had this argument enough already here. Suffice it to say, my hope is that the entire left side of the political spectrum learned some lessons from 2016 and adjusts accordingly going forward.
I agree with Kevin Drum and Krugman that these Republicans see the writing on the wall and are greasing their personal skids into K Street and think tanks or Fox News gigs ahead of the 2018 slaughter.
@Senyordave:
You don’t compromise with elbows. You extract a price.
Also, 3 downvotes for “build more housing?” That’s sad….
@James Pearce:
Are you talking about unicorn housing that the state builds at a net loss, but offers all of the modern cons while still being aesthetically appealing, yet at a fraction of the cost that private builders could offer while still being perfectly integrated into existing neighborhoods just minutes away from quality schools and shopping?
Is that the housing that should be built?
Building new houses on the far edge of the last exurb doesn’t really help. Arguably it increases the housing supply by a .00000001 percent or so per new house (hold on, let’s count… okay 8 places after the decimal point so the scale is correct)
Or should the state just declare that this a market bubble and reset the market to rational pricing so your house is only worth $400,000 and not the $2M everyone else thinks they can get for it? Is that what California should do?
@James Pearce:
Sorry, but ‘build more housing” is just an ignorant statement.
It’s 4 downvotes, now, btw.
@Senyordave:
Considering much of the GoP base is retired people I really don’t take their purported threats against SS and Medicare all that seriously. They certainly would not have the votes for major cuts in the Senate regardless.
@James Pearce:
One time when I was ‘shrooming hard back in college the Gophers were playing UMD and a Bulldog punched in a poorly played save. My immediate reaction in that psychological state was “Everyone should score a goal all the time.”
My heart was in the right place, but logistically that is a nightmare.
It would require that everyone play hockey so that means that we would need to build one new rink for every 22 citizens. There would have to be roads and parking and sewer hook-ups and electric grid connections and zoning law changes, but there would be no one to do those things because they are all be playing hockey and scoring goals continuously. Where will we find the mental health professionals who will deal with the goalies who are continually being scored upon, or the players poking it into the back of the net over and over and thus develop narcissistic tendencies. And who, please tell me, is playing defense? Older folks would be having medical events like crazy, and they’d try to call 911, but phone would just ring and ring and ring because the all of the 911 operators are already playing hockey.
No matter my psilocybin solidarity intent, saying “Everyone should score a goal all the time” was rank foolishness.
Saying “maybe build some housing” might be more foolish.
Everybody keeps repeating that, but the GOPs say that because they can’t state the real reason, that the Koch Bros and a lot of the rest of the billionaire boys club threatened to stop donating unless they get their taxes cut. (Actually, a couple of them have screwed up and said as much.)
@Andy:
They’ll leave us old people alone for awhile. They’ll go for a two tier system, screwing young people first. It won’t be elimination, it will be “privatization”. ‘The miracle of markets will be better for you.’ The real driver here is no longer the ideological opposition to “welfare”, but Goldman Sachs’ frustration at seeing that huge pot of money they can’t manipulate.
Then, in twenty years, when the number of people on the old, good system has dropped they’ll start in on, ‘See how those olds are ripping you off? How dare they not suffer like you will.’ and cut bennies.
@de stijl:
Well it sure got your wheels turning…
And no, it’s not foolish. NY and CA have about massive amounts of homeless people living in them and chronic housing shortages. “Affordable housing?” Yeah, right. There are parts of CA that haven’t built any new housing at all this century and, really, I think they’ve been skating too long on sunny weather and gently ignoring their tent cities.
Does gentrification irk you? Build more housing. Want to attract decent employment to your city? Build more housing. Want to see more diversity in your community? Build more housing.
Let enterprising and diligent people do it, for profit, and while we won’t see a chicken in every pot or the rising tide lifting all boats –no need to be grandiose about it– we will see meaningful and measurable improvement on some of the social problems that progressives care about. (Or do they care about other things* more?)
* Protest, performative morality, “being on the right side of history,” that kind of thing?
@James Pearce: Nah, it’s right and salutary that the GOP owns this bill lock, stock, and barrel. Yes, I know that the Trumpies will still blame Democrats for their fate in the wake of this bill, but they’ll do that no matter what, so there’s no partisan politics rationale for helping the GOP shoot less of their own foot off.
@Tyrell: You pay attention to what John Layfield says about economics? Really? That IS interesting. Wa!
@Just ‘nutha ig’nint cracker: Big JBL net worth $10.5 million. He is a financial commentator on Fox business*. He recently retired from WWE to do charity work.
* Disney buys 20th. Century Fox!
@James Pearce:
Clearly I am missing what you think Democrats are selling that Republicans would buy. Votes? They don’t need them. Support? They don’t want it. Ideas? Yeah, right.
You seem to think that Democrats have some kind of leverage here that they aren’t using properly. What leverage is that? Use small words, since I seem to be a bit slow today.
I realize that it is just a technicality but the net effect of the increase in standard deduction AND the elimination of the personal exemption is:
For the individual the the AGI is reduced by 12,000 as compared with 10,400 currently.
For the married couple with no children the AGI is reduced by 24,000 as compared to 20,800 currently.
For a married couple with 2 children the AGI is reduced by 24,000 as compared to 28,900 currently.
From the viewpoint of taxable income, some filers maybe better off with the increase in standard deduction, while some maybe worse off (due largely to the elimination of the personal exemption).
@gVOR08:
I think you’re right. Old people vote and those than don’t will if their benefits get cut.
I’m almost 50 and grew up believing the Boomers would screw my generation out of the sweet deal they had. The 1983 reform did nothing to dissuade that opinion. All these years later that hot potato might whiff by or just graze us on it’s way to the millennials who can’t get out of the way. There’s still over a decade until the first Gen Xers retire though.
In short,we’ve known for a really long time that demographic changes and skyrocketing medical cost increases were going to cause issues with both Social Security and Medicare. The 1983 reform was known at the time to only delay things by a few decades but at least it did that. Hard to imagine something similar happening today.
In short we’ve been kicking that can for a long time and I doubt that will change with our current spineless and venal political class.
@James Pearce:
What you know about politics could be written in large font on the back of a stamp.
@Senyordave: The only thing the Democratic party would of gotten out of the Republicans is blame. If the bill turns out super unpopular the talking point would be “it’s the dem’s fault” if it turns out super popular it would be because the Republicans made it. It’s a heads you lose tails I win kind of thing.
This way it’s owned by the GOP for better or worse.
@James Pearce: Several Democrats tried to get a real seat at the table but they were rebuffed by the Republicans who just wanted them there as token Dems. Those Democrats figured out quite quickly they were only going to be used by the GOP for cover.
@michael reynolds: What I find annoying is James’ insistence on blaming the Democrats for everything. It’s the Democrats fault that the Republicans refused to deal.
@James Pearce: How the hell are the Democrats supposed to extract a price when they have absolutely no leverage? The GOP passed it easily with their own votes. You’re being absolutely ridiculous.
@Just ‘nutha ig’nint cracker:
The goal, of course, would not be to help the GOP pass their tax bill, but to advance Democratic interests. I keep wondering why that’s not a basic requirement of Democratic politics. It should be.
@DrDaveT:
There’s the carrot and there’s the stick. Republicans don’t want the Democratic carrot, and they have nothing to fear from the Democratic stick. Maybe we should get a bigger stick.
@michael reynolds:
I feel like I deserve a better comeback. I burn you with wit and you get me with the schoolyard stuff?
@Matt:
Step 1: We need new Democrats. Step 2: We need those Democrats to fight.
They represent half the country and they have “no leverage?” That’s absurd! (And it’s not ridiculous of me to think so.)
And you know, I don’t want to be harsh on Democrats, but I can’t help it. I see Adam Schiff get on TV and talk about how he’s “worried” Republicans are going to shut down the Mueller investigation and I think, “Dude, I’m worried. You’re in Congress.”
Those guys work for us. We don’t work for them. We should expect results, not make excuses.
“Build more housing” is a great goal, but if it’s just “build more housing” and then you just mic-drop it at that point, you’re not being serious. Is the purpose to eliminate homelessness or is it to cheapen the existing stock so that first time home-buyers can enter the housing market more easily?
You’ve just implied several metric sh!t-tons of logistical nightmares and years of bureaucratic hoop jumping.
Who builds the new housing, where, how is it financed, who will live there, how do we manage that process, can the sewer system handle the runoff, can the electrical grid withstand the new demand, water mains, roads, parking, sidewalks, schools, hospitals, police, municipal workers, etc, etc etc.
A goal is not a plan.
What something?
Humiliation?
Kabuki-style ritualized denigration?
When compromise means that you accede to being kicked in the face live on C-Span, you’ve agreed to a bad bargain.
Optimally, compromise is a win / win.
Usually, it works out so that is more like I-didn’t-lose / you-didn’t lose. That’s perfectly acceptable. That’s a decent compromise.
Saying “I want you to kick me in face and humiliate me, and in return, I get nothing, but you get to call me an America-hating commie” is not an offer folks should accept.
@de stijl: Something that the Brits should have learned about Brexit….
(My own view of the whole tax bill is ok, given this mess and obvious finagling everything for the rich, I have absolutely no inclination to keep myself from tax arbitraging like mad. I can save tons of taxes by shoving all my expenses through my little LLC? Fine. I will do that. I just wish that we could tie the “but this will raise greater taxes for the government by the huge trickle-down effect and companies creating jobs like mad!” around the necks of all the Republicans who claimed it–so that when it doesn’t, they all commit seppuku.)
@Andy:
Does your calculation factor in the loss of personal exemptions?
Yes, your standard deduction will nearly double, but you almost certainly lose the ability to itemize because of that (itemization is entirely predicated on your itemized deductions totaling to more than your newly doubled standard deduction) and you stand to lose $20,750 (in 2018) in personal exemptions regardless. On net, your taxable income should be skyrocketing. I think maybe you need to run the numbers again.
@grumpy realist: Of all of the tax reform bills that Rs could have foisted on us this one is far from being the worst thing they could have done.
They have the numbers. Barring blatantly unconstitutional acts, they can literally do anything they desire in both the House and Senate and the Ds cannot prevent it.
—–
Do you think Brexit will actually eventually happen? If the referendum were re-voted tomorrow it would lose like ~ 60 / 40 per new polling. Reality is intruding. People are getting freaked out about the consequences.
@Matt:
Democrats have a great deal of leverage in the Senate, generally speaking. They got shut out of this particular exercise in stupidity due to the reconciliation rules.
How do they extract a price in that scenario? Simple. Make it clear to the majority leadership that your caucus is marching together in lockstep, and as a result nothing the majority subsequently wants to pass will move forward one inch in the Senate unless you’re given a seat at the table in this exercise.
@grumpy realist:
Which is exactly what happened in Kansas, with predictable results.
On the other hand, I do admit to having gleefully sought out acquaintances who blabber on and on endlessly about deficits and debt, but who are thrilled with this tax package – just to have the opportunity to point out their hypocrisy.
I think that the operative question here becomes one of “will the electorate see the looming debt iceberg, and react to it by retaliating against Republicans at the polls, before the amount of damage done to the ship becomes irreversible?”
I have my doubts about that one, hence my move to extricate the lion’s share of our assets from being dollar denominated, now, while there is still a somewhat equitable degree of value left in the dollar. Left unchecked, this bill will put us as a nation at federal debt comprising 97% of GDP within the space of 10 years. That just isn’t sustainable. It may be what finally wrecks this failing framework of a union altogether.
JKB shows us that to defend GOP policies you have to be dishonest.
@HarvardLaw92:
Yes, the combination of a higher standard deduction, a cut in the marginal rate of 3% (15%-12% for middle income households) and the doubling of the Child tax credit more than make up for it. In combination they zero our tax liability and we would get money back thanks to the refundability of the child tax credit.
BTW, the NYT calculator gives an estimated average $1860 tax cut for families similar to mine.
@Tyrell: You do realize that Disney bought only the Entertainment divisions of 21st Century Fox, right? The Murdocks are still trying to merge the News Division with Sky TV.
Although Disney would be a good fit for Layfield.
@Andy:
Get back to me once you’ve filed your taxes. I suspect the reality may not pan out as you expect it to.
That having been said, you’ve just described a situation where you are not only contributing nothing with respect to income tax, you’re actually becoming a net recipient of tax dollars paid by others (or, more pointedly, the additional borrowed dollars which will be required to pay you). Your effective tax rate is negative.
Do you consider this to be prudent fiscal policy?
@HarvardLaw92:
I will, but I’m confident in my estimates, assuming this bill passes as described. My tax situation is currently very simple and therefore estimates are easy.
No I don’t. This bill makes something I already thought was a problem much worse – it narrows the tax base further than it already is. Federal general revenues will now be completely dependent on a relative minority of wealthy households in the US. I don’t think the effects of that will be good at all from both a fiscal and social point of view.
@Andy:
I’ll be honest here. I knew what the answer to the first question would be before you (or someone else) replied to it. I wanted the debate on the second point. The OP was a former prosecutor’s way of getting somebody else to move the discussion from point A to point B and give a supporting example from their own experience, sorry.
That having been said, I’m glad we agree on point B. It’s ruinous fiscal policy. The fact that they expect and admit that it will increase federal debt by > $1 trillion (at a minimum) is testamentary evidence that GOP platitudes about sound fiscal policy are outright lies, and they know them to be such before they utter them. We’ve effectively legalized bribery in this country.
@HarvardLaw92:
Nothing surprising here. The “Washington Rule” is that fiscal responsibility doesn’t matter for one’s own policy preferences.
@James Pearce: Once again in response to a question asking for real information you respond with a bunch of platitudes without actually providing anything useful..
You remind me of the character Steve Castle from Futurama. All you have are buzzwords and meaningless comments. For once I’d like to see you actually lay out a plan or course of action. So how would you “extract a price” out of the GOP if you were dictator in chief of the Democratic party?
@Just ‘nutha ig’nint cracker: I am wondering how this proposed tax reform could affect my LexCorp stock earnings.
@James Pearce:
Damn, you’d think I’d have learned by now. I actually almost thought you had a real substantive recommendation to make.
It’s like Charlie Brown and Lucy and the football… My bad.