Senate GOP Unveils Tax Proposal: Here Are The Main Highlights

Tyler Durden's picture

Confirming the leaks that occurred in the last hours, Senate Republicans just released their proposal for the tax bill and it is notably different from the House bill.

Here are the most notable highlights (more details below):

  • 20% permanent corporate tax cut delayed by 1 year
  • Complies with the $1.5 trillion cost (will cost $1.44 trillion)
  • Preserves 7 tax brackets: top tax bracket is 38.5%, down from 39.6%
  • Doubles standard deduction from $12,700 to $24,000 (married couples)
  • Ends state and local tax (SALT) deduction; keeps business deduction
  • Keeps the mortgage Interest deduction cap at $1 million
  • Preserve the estate tax, doubling the current $5.49 million exemption for individuals
  • Raises the child tax credit to $1,650 from $1,000
  • Sets 10% tax rate for US companies with IP in foreign low-tax jurisdictions
  • Full expensing of capital investments for five years
  • Preserves 401(k)s IRAs,
  • Sets repatriation rate at 12% for liquid assets, 5% for illiquid assets
  • Carried interest loophole unchanged
  • Electric Vehicle tax credit is spared (good news for Elon Musk)

Bloomberg details how the Senate proposal compares with the House version so far on some key areas, updated throughout the day:

INDIVIDUAL

Income Tax brackets

  • WHAT’S IN THE SENATE BILL: The Senate would include seven individual brackets of 10 percent, 12 percent, 22.5 percent, 25 percent, 32.5 percent, 35 percent and 38.5 percent. The last one would be a decrease from current law’s top individual rate of 39.6 percent. Thresholds for each bracket weren’t immediately available.
  • HOW THAT DIFFERS FROM THE HOUSE: The House would shrink the number of brackets to four with these thresholds for married taxpayers filing jointly: 12 percent: $24,000 to $90,000; 25 percent: $90,000 to $260,000; 35 percent: $260,000 to $1 million; 39.6 percent: $1 million and up. The thresholds would be adjusted for inflation based on chained CPI, a formula that would subject more income to higher tax rates than under the regular consumer price index.

State and Local Tax Deductions

  • SENATE BILL: Eliminates state and local tax deductions for individuals, according to Senator John Hoeven of North Dakota.
  • HOUSE BILL: The deduction for state and local income taxes or sales taxes would be repealed, while the deduction for state and local property taxes would be capped at $10,000.

Home-Mortgage Interest Deduction

  • SENATE BILL: Preserve the existing mortgage-interest deduction for home purchases with up to $1 million of debt.
  • HOUSE BILL: The home-mortgage interest deduction would be reduced for new purchases to $500,000 of debt from the current $1 million. The bill would also limit the deduction to one principal home, ending the break for second homes.

Standard Deduction

  • SENATE BILL: Roughly doubles the standard deduction to $12,000 for individuals and $24,000 for couples.
  • HOUSE BILL: Same.

Medical Expense Deduction

  • SENATE BILL: Preserve existing medical expense deduction and enhance the standard deduction for the blind and elderly.
  • HOUSE BILL: Repeal the medical expense deduction.

Child Tax Credit

  • SENATE BILL: Expand the credit to $1,650 from $1,000.
  • HOUSE BILL: Increase the credit to $1,600 per child younger than 17 -- up from $1,000 -- and includes an additional $300 credit for each parent as part of a consolidated family tax credit.

Estate Tax

  • SENATE BILL: Preserve the estate tax while doubling the current $5.49 million exemption for individuals.
  • HOUSE BILL: The estate tax would end after 2023. Before then, the current $5.49 million exemption for individuals would be doubled.

BUSINESS

Corporate Tax Cut

  • SENATE BILL: A corporate tax-rate cut to 20 percent would be delayed by one year to January 2019, according to GOP Senator Bill Cassidy of Louisiana.
  • HOUSE BILL: The corporate income tax rate would be a flat 20 percent starting in 2018.

* * *

The question now is whether the Senate bill will pass the House, and while there are some grumblings about the corporate tax cut delay (which will force companies to minimize 2018 profits and boost them in 2019), there may be just enough support for it to pass.

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ultraticum's picture

100% Statist bullshit.

Cynicles II's picture

Impossible to reduce spending. Raising taxes, no problem.

Politicians are parasites; "We the people" are the host.

CH1's picture

As people keep obeying, why should anything change?

HisNameIsRP's picture

The cut that never was

Beam Me Up Scotty's picture

"Politicians are parasites; "We the people" are the host."

I think its more like We the People are slaves.  Uncle Sam is the master.

junction's picture

Ending the SALT tax deduction while keeping the carried interest tax loophole shows how incompetent McConnell is.  McConnell's role model must be Pelosi.

rccalhoun's picture

This horse shit will add 100 pages to the tax code.  SIMPLIFY it?   Never

Skeptophrenic's picture

YAy, WINNING!

Seems a lot like reshuffling of the deck chairs to me. Problem is, the ship is still sinking!!

chestergimli's picture

I can’t believe that the house would eliminate the deduction for medical expenses. Correct me if I am wrong, but this includes what US citizens have to pay for health insurance. That in itself is a tax hike considering what some people have to pay

Beam Me Up Scotty's picture

Ya well, welcome to the club.  Currently, small business owners cannot deduct their healthcare premiums either.  Their employees can deduct premiums pre-tax, but the employer cannot.   So thats effectively a tax increase on the employer.

Tactical Joke's picture

Why reduce the top rate? PR fail, Republitards.

BreadnH2O's picture

'Cause wealth disparity isn't high enough.. duh... This ain't the golden age, it's the platinum age!

Beam Me Up Scotty's picture

Because the top rate doesn't matter.  Warren Buffet pays himself some small amount like $100,000.  The rest of his income comes through long term capital gains.  20% tax rate on those.  The uber wealthy aren't paying those top rates, because they change how they get their income. 

Singelguy's picture

What they fail to mention is that a lot of deductions are eliminated so that the effective tax rate is actually higher.

hooligan2009's picture

here's a postcard tax bill - just twelve words

"flat rate 20% tax for all - individuals get first 15,000 tax free"

now, why is that any worse than all this bullshit legislation? no deductions, for corporations or individuals, that's it

pods's picture

Because they cannot buy votes with favored groups.

Shit, was that out loud again?

My bad.

pods

Endgame Napoleon's picture

I am not in their favored groups. I, and the other 28% of childless citizens over 40, including a ton of individuals who have to cover all household bills on one earned-only and modest income stream, are hated by both sides of the Uniparty.

Why do we stand in long lines to vote for these Swampians to have $175k jobs, where they vote in more monthly welfare and more tax welfare to make it easy for parents to work part-time jobs and drive wages down for those with no unearned income from spouses and no monthly welfare and child-tax-credit welfare?

If we vote for the Republican side of the Uniparty, we also vote for womb-productivity rewards through the tax code in the form of estate tax windfalls.

Rent is unaffordable for millions of individuals.

More childless individuals than welfare and tax-code-favored parents end up working the 1099 jobs, paying twice as much SS tax.

Groceries are taxed in my state at almost 10%, and my state has a $19k per capita income.

This is not an issue for many in the sex-and-reproduction crowd because their grocery bills, like their rent bills, are paid by taxpayers in increasing amounts per child produced.

The Uniparty NEVER addresses ANY economic issue faced by the TWENTY-EIGHT percent of childless individuals over 40....never.

The Uniparty ONLY represents people with kids.

The Uniparty represents illegal aliens with kids more than it represents any of the 28% of childless citizens over the age of 40, certainly the working-age ones. The Uniparty does not represent young people. either, except for those who have reproduced.

Stroke's picture

The rent is too damn high !

Beam Me Up Scotty's picture

"Because they cannot buy votes with favored groups."

I've said that for years here on ZH.  The tax code is nothing but a vote buying scheme.  Thats EXACTLY why we don't have a 20% flat tax, fill out the postcard tax system.  They cannot control you then.

shovelhead's picture

Sorry. Your low sperm motility is none of our concern.

338's picture

Standing in line to vote for these fucking swampcreatures is not just a sign of weakness, but an act of violence on your 'neighbor', as it invites some psychopath to use force on an innocent victim on your behalf to steal their stuff to 'make' your life better in some mysterious way.

 

Marxs and Hegel nailed this shit, only now we call it...

 

Oh shucks let's call it what it is.

 

Communism, Marxism.

 

The Uniparty will relent at 100% slavery, and even then they will want more.

Fucking theives.

 

TAXATION IS THEFT.

Vote Freedom, elect no one.

 

Lead yourself for a while,if you dare, see how it feels.

 

It might be kinda neat to walk around without a leash in your mouth holding your ass cheeks open for some puke to use you as a sex toy.

 

Sean

mkkby's picture

They can't find one single thing that can be cut. Everything the gov does is mission critical importance.

Just keep raising taxes for ever and ever. Is this how Tump, Tillerson, Mnuchin and Ross ran a business?

whatswhat1@yahoo.com's picture

"flat rate 20% tax for all - individuals get first 15,000 tax free"

 

Resulting in ten million unemployed in the accounting industry.  Let's do it!

RobertTheGenius's picture

thats right around the corner anyways.. its called SOFTWARE!

RobertTheGenius's picture

thats right around the corner anyways.. its called SOFTWARE!

RobertTheGenius's picture

thats right around the corner anyways.. its called SOFTWARE!

RobertTheGenius's picture

thats right around the corner anyways.. its called SOFTWARE!

ElTerco's picture

Flat tax is a giveaway to the ultra-wealthy at the expense of literally starving the people that do all the real work in society having the lowest possible wages.

LawsofPhysics's picture

Expand the tax credit for useless breeders...?

LMFAO!!!

Where is HH, the "rearranging deck chairs" analogy makes a lot of sense.

Moreover, why the the fuck are we paying any taxes with the primary dealer banks and The Fed calling "money" into existance with no real collateral requirements?!?!?!

"we would never directly monetize the debt, that would be bad" - Ben Bernanke

How is this fuck still alive?

 

balz's picture

You don't have kids, do you?

338's picture

No.

 

If I did I'd pay for them.

 

Wild fucking concept I'm sure for most.

 

I buy my own liquor, guns and every other thing I own.

 

Why is that such a strange concept in this collection of.....

 

oh just wait for it.

 

Collectivists...  I'll take collectivists for 1000 USD Alex.

 

sean

44magnum's picture

Because no one has killed him yet?

TeethVillage88s's picture

LOL

Yeah... $.5 Trillion in Medicare Receipts per year
$1.5 Trillion in Medicare/Medicaid/HHS Annual Spending
$1 Trillion om Social Security Agency Annual Spending
$1 Trillion in MIC Spending
$4 Trillion in Total Federal Annual Budget Spending

Well maybe ... Primary Dealers, Treasury Sales, Foreign Treasury Sales, Keeping the US Dollar Strong, it is all part of the same mechanism to keep the dollar strong...

IRS, Payment where earned income credit exceeds liability for tax 2014 = $60.09 Billion
IRS, Payment Where Child Tax Credit Exceeds Liability for Tax 2014 = $21,49 Billion
2014 Federal Outlays for SNAP, Child Nutrition, & WIC = $102 Billion
2014 Outlays Federal Grants to States for Medicaid = $301 Billion
Total—Department of Health and Human Services Outlays 2014 = $1.032 Trillion

2014 Federal Outlays for SNAP, Child Nutrition, & WIC = $102.34 Billion
2014 Federal Outlays DOL Unemployment Trust: Federal-State Unemployment: State Benefits, = $42.18 Billion

----
Job Training & Assistance, Depart of Labor:

Little to show federal budget help in job formation, but Annual Funding from Federal Budget:

2014 federal Outlays Training & Employment Services = $3.10 Billion (Decreased)
2014 federal Outlays Office of Job Corps = $1.59 Billion
2005 federal Outlays welfare to work = $6 Million (Discontinued, Discontinued)

---
Treasury, IRS Credits:

IRS, Total Outlays—Internal Revenue Service, under Treasury, 2016 = $133 Billion
IRS, Payment where earned income credit exceeds liability for tax Outlays 2016 = $60.5 Billion
IRS, Payment Where Child Tax Credit Exceeds Liability for Tax Outlays 2016 = $20 Billion
IRS, Payment Where Child Tax Credit Exceeds Liability for
IRS Refundable Premium Tax Credits and Cost Sharing Reductions Outlays 2016 = $31 Billion
IRS, Payment Where American Opportunity Tax Credit Exceeds Liability for Tax 2016 = $4 Billion

Rainman's picture

Did I miss the part where they do something about the carried interest loophole ?

Chris88's picture

Yeah you must be pissed they haven't found a way to steal more money, I mean that's definitely the takeaway here.

Late onset ADHD's picture

no SALT?... great... double taxation is always welcomed...

Quivering Lip's picture

Yep nothing like taxing you on taxes already paid. Those blue states ya know like Idaho7.3% Nebraska 6.84% South Carolina 7% Georgia 6% Iowa 8.9% North Carolina 5.75% Missouri 6% Ohio 5% Kentucky and Tennessee 6% Arkansas 6.9% Utah 5%.  There are more but I'm pretty sure those BLUE states might get a little pissed. 

All so corporations that rarely pay 35% can buyback more shares and give out more bonuses. Sounds like states with no income tax will be the places to live

Endgame Napoleon's picture

I live in a state with no income tax on frequently babyvacationing, dual, high-earner parents and lots of welfare for fertile illegal aliens and frequently absenteee single momma workers. They work the 20 hours per week required by welfare reform, staying below the less-than-$1,000-per-month earned income limit for welfare, and get their rent and groceries paid for sex and reproduction out-of-wedlock, right here in the Bible Belt, with no critique whatsoever. They also get child tax credits of up to $6,269 that MANY brag about spending at the beach with boyfriends or on master bedroom furniture.

They have plenty of excused time off in the many 99% mom-staffed, mom-managed workplaces to indulge themselves with their “child” tax credit windfalls. You take this week off for baby pageant, $10-per-hour momma, and your momma manager will take next week off for baby travel soccer. Rinse and repeat next month.

If you are a single, childless individual, it is a horrible place to live, in that the jobs—from top to bottom—are absolutely dominated by back-watching and well-vacationed parents.

The per capita income in this state is $19k. If you need to live on $19k in earned-only income, with no pay for sex and reproduction from the government through the rigged welfare and taxation systems, you are in trouble, especially in a state with a lot of part-time, temp, 1099, churn, pyramid and scam jobs, where UC is rarely (never in many cases) available to cover rent between churn jobs, and where the sales tax on food is near 10%.

Delving Eye's picture

"If you are a single, childless individual, it is a horrible place to live." 

The Deep South is a horrible place to live even without the above qualifications. I live in the Northeast. Yes, I pay high property taxes, but the quality of life, people, and services in my neighborhood make it worth it. The type of lowlife, welfare-recipient riffraff you describe doesn't live anywhere near me. And that's a good thing.

In my view, such types should not procreate. The government should give away birth control, vasectomy/tubal ligation/abortion procedures. Maybe even incentives NOT to procreate (instead of the current welfare incentives TO procreate) with additional incentives to get trained/employed.

Late onset ADHD's picture

those states are 'blue' in behavior only, as they run the table and fuck with their 'red' electorate... insidious shit and clueless residents... thank public schools for their ignorance...

supersajin's picture

What ever happened to the Flat or Fair Tax?

youarelost's picture

No one will vote in 2018

chunga's picture

Great opportunity for non-reds and non-blues that's for sure. Every single one of them should be thrown in the pit of misery.

I'm sick to death of these lousy pigs.

Endgame Napoleon's picture

We need a new party to represent all of the citizens that The Swamp ignores. Once the kids of those single moms are grown, they are in the exact same boat as so many childless, single women, struggling to cover rent, with The Swamp making sure that wages never go up by offering one stream of unearned income after another to people with kids.

Cautiously Pessimistic's picture

They are bickering over my hard labor essentially.  How much of it will they let me keep?

 

Government is the great fiction, through which everybody endeavors to live at the expense of everybody else. ~ Frederic Bastiat
ElTerco's picture

Oh, they'll let you keep all your labor.

In fact, they'll encourage you to take on as much more as you are going to need to feed and house yourself.