Republicans released their tax plan

 

 

 

The complete tax plan revisions to 1986 Tax Code as presented by the Republicans can be read HERE.
The Goals of President Trump’s Plan can be read HERE.

Republican Tax Plan Cuts Middle Class and Corporate Taxes, Leaves Retirement Savings Safe

Breitbart
John Carney
November 2, 2017

We’ll follow along with the news and analysis of the bill all day. Refresh this page for the latest updates.

Here are the highlights:

  • The House bill reportedly will permanently and immediately cut the corporate tax rate from 35 percent to 20 percent. Lawmakers dropped earlier plans to phase-in the tax cut over a number of years or have the cut sunset in the future, both measures aimed at reducing–on paper, at least–their impact on long-term budget deficits.
  • The pass-through rate will be 25 percent, a huge cut for many small-businesses organized as sole-proprietorships and partnerships.
  • As first reported by Breitbart in August, the bill will impose a one-time tax on corporate profits that have been accumulated and held abroad. By taxing these profits at 12 percent on a one-time basis, the bill eliminates the incentive for corporations to continue to avoid repatriating the funds and investing them in America or distributing them to shareholders. Illiquid corporate assets will be taxed at a lower rate of 5 percent.
  • The risky plan to change the way Americans save for retirement, and possibly raise taxes on middle-income Americans, has been dropped. The bill will not change 401(k)s, according to talking points distributed by the House GOP leadership.
  • The bill is named the Tax Cuts and Jobs Act, breaking with recent Washington precedent of giving bills titles with acronyms that indicate the goals of the legislation.
  • The bill cuts the current seven individual tax brackets down to four: 12 percent, 25 percent, 35 percent, and 39.6%. Originally, the GOP framework planned to drop the 39.6 percent rate. It was preserved in an effort to prevent tax burden from shifting to lower income taxpayers.
  • A big question has been where the new brackets would break. Now we know. For individuals, the 25 percent rate starts at $45,000, the 35 percent rate at $200,000, and the 39.6 percent rate at $500,000. For married couples filing together, the 25 percent rate will start at $90,000, the 35 percent rate at $260,000, and the 39.6 percent rate at $1 million.
  • Standard deduction rises to $12,000 from $6,350 for individuals, and from $12,700 to $24,000 for married couples.
  • The House bill expands the child tax credit from $1,000 to $1,600, which is a smaller expansion than conservative lawmakers in the Senate had pushed for.
  • The threshold for the death tax will double from its current $5.6 million per person and $11.2 million per married couple. It would be ended altogether in 2024.
  • Corporate interest deductions get capped at 30 percent of earnings before interest, taxes, depreciation, and amortization. Small businesses and real estate firms, which are often highly leveraged, are exempt from the cap.

Read the complete article HERE.

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From around the news sites, here are other changes that may be included in the new GOP tax plan, at least for now. We will have to wait to see what survives the “markup” time when congress members hash out details and lobbyists hit the doors running in order to get their interests taken care of.

Goodbye private-activity bonds: The bill ends a deduction for interest income from private activity bonds, a program that allows businesses to issue bonds that mimic the tax-exemption of municipal bonds when they finance public works-type projects, such as highways and airports.

CEOs and corporate fat cats get hit with a double-whammy: Businesses will lose the ability to deduct executive compensation above $1 million under the bill.

Bill Kills Electric-Car Tax Credit: The House bill would end a $7,500 tax credit provided for consumers who purchase electric vehicles.

Small-Business lobby group says it is not supporting the tax bill: The National Federation of Independent Business, a major lobbying organization for small business, has issued a statement saying it is “unable to support” the House tax bill. It says it will work with lawmakers to “make the necessary corrections.”

Protection for churches from the IRS: The bill includes a provision that would protect churches from the risk of losing their tax-exempt status for commenting on political affairs in the “ordinary course” of the church’s business.

Energy Sources:

Petroleum Industry: It it ends some minor tax breaks received by the oil industry, including a tax credit for marginal wells. The oil industry would keep its largest targeted tax measures by preserving the intangible drilling cost deduction and the special accounting rules known as “last-in first-out.”

Wind and Solar Energy: Tax credits cherished by the wind and solar industry remain under a rewrite of the tax code revealed by House Republicans, but the tax overhaul bill would trim the wind energy’s production tax credit by more than a third. Wind energy changes estimated by congressional analysts to cut more than $11 billion in benefits to the industry over the next decade.

Nuclear Industry: The bill also extends an estimated $6 billion tax credit for the nuclear industry. Good news for some companies since building has been delayed and their old credits may run out before the plants are completed.

Other Sources: Other energy sources, such as geothermal, small-scale wind and fuel cells receive some tax credits.

Deduction of mortgage interest and charitable gifts: The mortgage interest and charitable deductions aren’t going away, but there’s a new cap on the mortgage interest deduction for newly purchased homes – up to $500,000 in loan debt – that will mean people with very expensive newly purchased homes won’t be able to deduct the current $1 million on their interest payments.

State and local deductions: People will still be able to deduct up to $10,000 on the property taxes they pay locally, but they will no longer be able to deduct the other taxes they pay to state or local governments from their federal tax payments.

Child tax credit: The plan introduces a new family tax credit that expands the child tax credit and adds a new credit for parents and non-child dependents. The current child tax credit is currently worth up to $1,000 per child, and will increase to $1,600 per child under the plan. There will also be an additional $300 credit for any parent or non-child dependent.

Earned income tax credit:  No changes

Companies still be able to hold money abroad: Not tax free. The tax bill will force them to pay a minimum tax regardless of where the profits are. But U.S. companies that take advantage of lower-income tax rates abroad will still have incentives to do so. The companies that benefit the most from this are technology and pharmaceutical companies. The tax bill would create a new foreign minimum tax on foreign earnings in an effort to prevent companies from simply stashing money abroad without paying any U.S. tax.

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Of course, the Republicans are going to be upbeat and try to sell their plan. Of course, the Democrats and liberals are already screaming. Of course MSM is running headlines that rant on and on about doom and gloom not just for business but middle class and all future generations.

The plain truth is that this is a starting point. By the time congress starts marking the bill up with  their “magic” markers, lobbyists get through slamming members with their issues, and worst of all most Democrats have their crying meltdowns, no one can guarantee that what was written will be still in the final round. However, this is a positive step forward to fulfilling President Trump’s plans. It is also the first time since 1986 that the tax code has been publically pushed so hard to be revised.

There have been dozens of bills addressing tax code and a few that made it to reconciliation since then but nothing ever seriously addressed a major revision. The trick in this year’s rendering is to make sure that nothing stalls it or stops the bill from being placed on Trump’s desk to be signed this year or early next year.  Most of the information centers around going into effect January 1, 2018, so while a little time breather is available striking while the iron is hot and the impetus is there is extremely important to get the deed done. There is apparently a Republican plan to prevent just such a problem by administrative moves and manuevers.

Good luck. I hope that we see positive efforts and that the citizens of our country and its businesses ALL see a surge in optimism and value from a newly revised tax plan.

Again, though, the one issue I ALWAYS have with stuff like this in a bill is that they “correct”, “delete”, or do other switch and baits to revise an OLD law. They never seem able to say the old has been retired and here is a completely written new law. Totally escapes me how the “hades” they get any or all of the changes completely correct with revision  and they can’t provide a complete NEWLY WORDED AND PREPARED Law rather than diddle with an old one.

–Uriel–

 

 

 

About Uriel

Retired educator and constitutionalist
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5 Responses to Republicans released their tax plan

  1. Robert Miller says:

    Will this bill be retroactive for this past year???? Inquiring minds would like to know!!

  2. Shar says:

    The hard part is going to be passing the Senate. DJT thinks some dims will vote for it. I can only think of one, Manchin.

    • Uriel says:

      Maybe but McConnell and others seem to believe it could get passed on a tie breaking vote IF the 50 can be counted on and the VP votes as a tie breaker. Just as Ryan believes that a squeeze play on filibustering can happen and it could pass in the House. I don’t believe them but it might hqppen. The VP has already broken more ties than most in history I think.

  3. Shar says:

    Where do the 3 usual defectors stand?

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