Tax Bill Fiasco: Senate Considering 1 Year Corporate Tax Cut Delay; Dollar Slides

Tyler Durden's picture

Suddenly Republican tax reform is looking deader than a doornail.

According to the Washington Post, which cites " four people familiar with a draft of the legislation " not only is there little to no compromise on the way forward, but the only thing Senate Republicans leaders can agree on is to punt the centerpiece of the GOP tax plan by at least a year, and are considering a one-year delay in the implementation of a major corporate tax cut. This change would lower the corporate tax rate from 35 percent to 20 percent in 2019, not 2018 as currently constructed by a House GOP bill. And while the delay would save $100 billion in much needed funds, it would be met with resistance from Trump, who wants the tax cuts implemented immediately.

In any case, to ensure that companies don’t postpone major investment decisions and wait for the lower rate in 2019, Senate Republicans are considering allowing companies to immediately deduct capital investments in 2018 from their taxable income, the WaPo sources said.

The news comes amid the expected growing opposition in the Senate to the current bill. One day after Trump nemesis John McCain said tax reform is "dead on arrival", on Tuesday, Sen. Ted Cruz said that the House tax bill could end up raising taxes on some middle-class Americans, and he pushed for assurances that the Senate bill would lower everyone’s taxes. Meanwhile, senators Marco Rubio and Mike Lee are pushing for an expansion of the child tax credit beyond what was introduced in the House. They have called for raising the child tax credit from $1,000 to $2,000. The House bill would raised the credit to $1,600.

Furthermore, the WaPo adds, that significant differences are also expected on the individual income-tax provisions.

Senate negotiators are planning to eliminate the state and local tax deductions that families take, going further than the House bill. They are also expected to retain roughly seven income tax brackets, rather than the four the House has proposed.

 

Details could change ahead of a formal release of a bill this Thursday by the Senate Finance Committee.

There will be a number of other changes to the taxes that certain businesses pay and the way companies are taxed on overseas earnings. Senate negotiators aren’t planning to include a temporary $300 “family flexibility credit” contained in the House bill. It’s this credit, which would expire after five years, that has fueled criticism that the House bill would eventually lead to higher taxes for some middle class families.

Separately, Bloomberg reports that on Tuesday afternoon President Trump called into a meeting between Senate Democrats, National Economic Council Director Gary Cohn and White House Legislative Affairs Director Marc Short, Democratic Sen. Jon Tester tells reporters. Tester said that Trump spoke (maybe screamed would be a better description) for about 15 minutes by phone from Asia and insisted the rich will be hurt by the tax bill.

During the same meeting, Dem. Senator Sherrod Brown gave Cohn copies of two bills he wants in the tax package, including one that would boost income of those making $20k-$70k. Brown added that Trump said over the phone he liked the ideas in the bills Brown presented; “I don’t know if McConnell is not hearing what the president is saying or if McConnell is not paying attention," Brown says.

Or maybe Trump just hasn't heard yet that Senate Republicans, after failing to repeal Obamacare not too long, now plans to concede on the most important aspect of Trump's proposed tax plan.

In any case, a decision on delaying the implementation of the corporate rate has not been made, the WaPol said. House Ways and Means Committee Chairman Kevin Brady (R-Texas), in writing his legislation, was considering having the corporate tax rate cut phase out after eight years but made a change the night before the bill was introduced to effectively make it permanent.

With the news of the potential delay hitting the market, the dollar in general, and the USD/JPY in particular was the first casualty and the pair was sold by leveraged accounts in Tokyo.

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Winston Churchill's picture

Couldn't organize a piss up in a brewery.

lil dirtball's picture

You couldn't be more wrong. (((These people))) are very organized - against you. Against anything that looks like personal individual freedom. Against traditional mores and values, like a nuclear homogeneous family.

To portray them as ignorant is to shine and perpetuate your own ignorance.

Winston Churchill's picture

I fully agree, but the shield of incompetence is now biting them in the arse.

I'm sure a new set of parasites are already warming up in the wings.

The system that allows them is the fault, but it was designed that way from the start,its no

abberation,something many on ZH cannot/will not comprehend.

Its a design feature,not a flaw.

californiagirl's picture

This is not a cut for large portion of middle class, especially those living in larger metropolitan areas where the cost of living is more expensive.  It will affect more than California, New York and New Jersey. Being a CPA, I created a model to compute differences between 2016 taxes and the new proposal. Any savings, basically for those who cannot itemize, are fairly small. A single person who cannot itemize, for example, has small savings until they hit around $94k, and then taxes go up.  There are few places in the U.S. where $94k is considered rich. 

And for those of you who want to gloat, yes, the middle class in California will be slammed, particularly if they own a home and have a mortgage.

takeaction's picture

This Tax bill is an absolute embarrassment as is Healthcare and all the rest.  These fucks just shit in the tub over and over.  

.

Time for Trump to start over.  

I say Flat Tax....No deductions.  15% Period. You earn $10,000 you owe $1500.  You earn $10 Million you owe $1.5 Million.  HOW FUCKING HARD IS THIS???

 

UPDATE @ lildirtballs comment below.  You are right.  They are super smart...They steal from us daily...and for us to even think that something is going to be passed to help us is LUDICRIS...thanks for correcting me.

 

 

Ghost of PartysOver's picture

Soon to be listed on the Extinction List: RINO's.  That is a pretty good consolation prize when Bannon starts recruiting primary challengers.  AndTrump stumps for them.

red1chief's picture

"I say Flat Tax....No deductions.  15% Period. You earn $10,000 you owe $1500.  You earn $10 Million you owe $1.5 Million.  HOW FUCKING HARD IS THIS???"

 

Very hard. Billionaires need to make the system look progressive, while deductions mean they pay very little.

USNVet's picture

Wait what the fuck am i missing? Capital investment is already deductable....

twh99's picture

Over years.  The proposal is to make it completely deductible in the year the money is spent.

twh99's picture

Idiots.  They have one fucking job, pass bills, and all they can do is argue.

 

lil dirtball's picture

Perhaps you were just lied to all your life - and believed it.

They're anything but idiots. They outsmart millions of people and steal from them right under their noses every day. They are smart and they are cunning.

lil dirtball's picture

The better point is that they will do it again tomorrow and pretty much into the foreseeable future and the comment section here on ZH and other, similar sites, will look the same. No one will even ponder personally doing anything about it. No - they will wake up in the morning and do the same thing they did yesterday - and the system perpetuates itself. And - they will have a multitude of excuses as to why they do this even if it isn't in their favor. Even if they're told it's to their detriment ... they will do it. Like a mule. Perhaps worse than a mule. For if you tell them that they can change things on both a personal and systemic level, they will become angry with you. Perhaps violent. There is no way to keep them off the bus. Just like there is no way to keep them from bitching about things they don't understand on social media boards.

See also: DSM-5.

Sy Kloine Bee's picture

You think if some people on here were doing something about it personally, they would be foolish enough to sabotage their plans by revealing them here?  Things happen all of the time and most people will never know.

pc_babe's picture

McStain, Dorker, McMummbles, Dotty Maine, Flake, Boozeman, Fischer, Toomy, Johnson, Collins, Alexander MurCOWski, Cochran et al ... stop masquerading at Republicans.

Come clean and do yourselves Arlen Sector proud

east of eden's picture

As if you had any 'moral authority' to tell others to come clean you fucking cunt. Get lost. This job will be done without the assistance of Mossad, thank you very much. Besides, aren't your 'bebe's preparing for the next war? Against Hezbollah, who will clean your fucking clocks for you?

Tell them they are wanted in Moscow, and to bring along survival gear.

brewing_it's picture

Republicans are just not interested in governing, the RHINOS are still upset their preferred neocon Hillary did not win.

jamesmmu's picture

Wow!! Is that mean VIX will explode higher tomorrow?

BlueHorseShoeLovesDT's picture

They will have Humpty Dumpty all back together by morning, BTFD.

These guys reversed a 700 point decline on election night, do you really think this tiny sell off will phase them.

east of eden's picture

Suddenly, everything the fucking congress thinks, feels, says and does is 'in jeopardy'.

As I've said many a time, what you need, and what the fucking Zionists really need is a very long, intense and severe beating.

Fiat Burner's picture

D.O.A. just like repealing Obozocare. 

BidnessMan's picture

Good - it should be dead.  Wake me up when Carried Interest is eliminated.

BlueHorseShoeLovesDT's picture

These aren’t the tax cuts your looking for

Bobportlandor's picture

They knew this Tax plan was dead and bought treasuries

10/30 now at .45% spread.

Date 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr 11/01/17 1.06 1.18 1.30 1.46 1.61 1.74 2.01 2.22 2.37 2.63 2.85 11/02/17 1.02 1.17 1.29 1.46 1.61 1.73 2.00 2.21 2.35 2.61 2.83 11/03/17 1.02 1.18 1.31 1.49 1.63 1.74 1.99 2.19 2.34 2.59 2.82 11/06/17 1.03 1.19 1.30 1.50 1.61 1.73 1.99 2.17 2.32 2.58 2.80 11/07/17 1.05 1.22 1.33 1.49 1.63 1.75 1.99 2.17 2.32 2.56 2.77
MK ULTRA Alpha's picture

We need term limits. A national referendum on term limits would win. If not, then destroy the country because it is headed lower and lower. Congress and federal government are destroying our country.

Winston Churchill's picture

Good luck trying to get a constutional Amendment passed because a referendum doesn't do dick.

Blame the constitution,written by oligarchs, for oligarchs.

The fact the convention was hijacked by them is missing from the history taught in schools.

Can't imagine why.

Thats why using article 5 is a double edged sword.

It will be hijacked again,or become a drone target.

red1chief's picture

Elimination of personal deduction combined with chain-weighted CPI means most but the corporations & super rich will end up paying more, while increasing the debt.

Davidduke2000's picture

do not ask why the republicans lost in Virginia.