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GOP Tax Plan Details

The GOP tax plan is being unveiled today after weeks of snarling and fighting within the party of what to include and what to kick out. Ultimately, as with every change to tax law, there will be new winners and losers. The chairs at the table will change and some new industry will be pleased with the reforms, while others, like home builders for example, will be adamantly opposed to the measure.

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Here are the most salient points as assembled over at Zero Hedge:

  • Lowers individual tax rates for low- and middle-income Americans to Zero, 12%, 25%, and 35%; keeps tax rate for those making over $1 million at 39.6%
  • Increases the standard deduction from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.
  • Establishing a new Family Credit, which includes expanding the Child Tax Credit from $1,000 to $1,600
  • Preserving the Child and Dependent Care Tax Credit
  • Preserves the Earned Income Tax Credit
  • Preserves the home mortgage interest deduction for existing mortgages and maintains the home mortgage interest deduction for newly purchased homes up to $500,000, half the current $1,000,000
  • Continues to allow people to write off the cost of state and local property taxes up to $10,000
  • Retains popular retirement savings options such as 401(k)s and Individual Retirement Accounts
  • Repeals the Alternative Minimum Tax
  • Lowers the corporate tax rate to 20% – down from 35%
  • Reduces the tax rate on business income to no more than 25%
  • Establishes strong safeguards to distinguish between individual wage income and “pass-through” business income
  • Allows businesses to immediately write off the full cost of new equipment
  • Retains the low-income housing tax credit

Here’s a more broad overview from Business Insider:

The “Tax Cuts and Jobs Act” will include a broad set of proposed changes to the corporate and individual tax system, building off a nine-page framework the White House and congressional Republican leaders dropped in September.

President Donald Trump reiterated his desire to get the tax bill on his desk by Christmas during a meeting at the White House on Tuesday. The president also concurred with the timeline House Ways and Means Committee Chair Kevin Brady, the author of the tax bill, has laid out. He wants to pass the plan through the House by Thanksgiving.

While the initial plan will be released Thursday, many GOP members are already suggesting that the bill could be substantially rewritten over the weekend before a scheduled markup in the Ways and Means Committee on Monday.

As the story notes, the plan can change further, and may likely be altered significantly from the currently proposed framework. The biggest sticking points are the State and Local Tax deduction (SALT) and the mortgage interested deduction. Those living in high tax states, like New York and California, are voicing severe opposition to eliminating the SALT deduction. As for mortgage interest, various home builders and real estate trade organizations are voicing concern that lowering or removing the mortgage interested deduction could be devastating for the housing market.

Nate Ashworth :Nate Ashworth is the Founder and Senior Editor of Election Central. He's been blogging elections and politics for almost a decade. He started covering the 2008 Presidential Election which turned into a full-time political blog in 2012 and 2016.

View Comments (20)

  • Do you call $24000 for a married couple "middle income"?Do you think that cutting student loan interest deduction while eliminating the estate tax is a good trade? Lowering corporate tax rate to 25% while leaving the loopholes that allow the most profitable corporations to pay little or no tax in place. How does eliminating the AMT benefit low to mid income wage earners?

    Do you think that the Rs have any more chance of passing this plan than "healthcare reform"?

    • I think they've got something good on the corporate side but they're totally blowing it on the individual side by nearly everything you mentioned. They have left the door wide open for criticism over lowering or eliminating the various deductions.

      If you want lower taxes, then lower the tax rates and cut the federal budget to follow suit. Messing with these deductions to balance the math, under the existing tax system, is guaranteed to result in the current mess of infighting over everyone's "favorite" deduction getting altered or eliminating.

      They made this overly complicated when it doesn't need to be.

      GOP: Here's our tax cut bill!
      Voter: Yeah but you eliminated my SALT deduction
      GOP: Yes, but future growth will offset it
      Voter: OK but my tax bill gets higher right now?
      GOP: Yes but look at the long term!
      Voter: No thanks

      Dumb move IMO.

      • When my parents died, I was prepared to do the paperwork to figure out the tax for me and my two brothers. After all, it was "income." I was pleasantly surprised that we got way too little to be taxed, but frankly, I didn't think it was right. Income is income.

        • About the same happened to me. As much as others write off for questionable, but legal, actions I didn't feel guilty at all. I paid what I should.

          • The budget office projects the plan will increase the deficit by $1.7 trillion over the next decade, much more than Republican claim.

            Ultimately, Republicans had to find a way to help meet their budget deficit of $1.7 trillion over the next decade so their strategy was to increases taxes on and cut the benefit for the middle class and the poor. A few are:

            It will increase taxes, on net, for families that have at least one child and make less than $100,000. The not so wealthy and the poor, as in all republican bills, get the shaft.
            A big reason is that personal exemptions — the $4,000 in income, per person, that families can write off — would disappear. The bill will increase standard deductions that all taxpayers can take, but the increase isn’t large enough for many families to make up for the disappearance of per-person exemptions.

            A shocker to the sports world, state and local governments would no longer be able to issue tax-exempt bonds to finance any facility that builds or houses professional sports games.

            the GOP plan eliminates the New Markets Tax Credit, which encourages businesses to invest in economically downtrodden areas. Or the veteran who doesn’t get a job because the WOTC was repealed or the fast food worker who can’t afford to move to a better paying job. Every Member of Congress who plans to support this bill needs to look a veteran in the eye and tell them why their mental-health care for PTS (post-traumatic stress) has been halted, or why they can no longer afford treatment for traumatic brain injury sustained while serving their country.

            The above is just the tip of the iceberg coming your way.

            Take the time and read the Trump/Republican budget plans for you.

        • That's well and good. But the definition of "royal class" is subjective since a modest estate worth a couple million isn't the same as an estate worth $10 million, etc.. but it will be treated that way.

          • I don't know where or how you live, but I would not call a couple of million "modest". That said, even now the threshold for the tax is 5.5 million single and 11 million for a couple. So 10 million is treated the same as a couple of million, neither would be taxed under current law. You have to admit, this law touches only the very wealthy.