Senate GOP Unveils Tax Proposal: Here Are The Main Highlights

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  • HOUSE BILL: The deduction for state and local income taxes or sales taxes would be repealed, while the deduction for state and local property taxes would be capped at $10,000.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.

Comments

SerfsUp Nov 9, 2017 11:05 PM Permalink

Aside from the corporate tax cut, this bill may as well have been sponsored by the Dems.  Sneaking through tax hikes by eliminating middle class deductions?  Classic leftist tactics.

LaugherNYC Nov 9, 2017 6:29 PM Permalink

Bought and Paid For: EVERY LIAR HAS SAID THEY WOULD END THE CARRIED INTEREST LOOPHOLE FOR HEDGE FUND CRETINS. EVERY LIAR HAS BEEN BOUGHT OFF WITH HEDGE FUND DONATIONS.The credibility of ANY tax program that does not end this repugnant special treatment for billionaire hedge fund managers is shot to hell. Fuck any and all who would propose any bill that fails to treat management income for what it is --- EARNED INCOME. Lying, low life, corrupt sacks of garbage. End of conversation.

konadog Nov 9, 2017 5:23 PM Permalink

One thing that's never on the menu: actually reducing the size of the bloated Federal government.My plan.1) Cut Federal government spending by 10% across the board. Nothing spared.2) Lower tax rates for everyone - rich and poor - by 10%3) Go to step 1World peace and prosperity in 6 iterations.

Mini-Me Nov 9, 2017 5:06 PM Permalink

Nothing but a big pile of social engineering masquerading as a tax bill.  Should we expect something simple from these clowns?Why a child tax credit?  If the couple is wealthy, they shouldn't get a rebate for squeezing out another rug rat.  If they're poor, we're subsidizing reckless parents to have kids they clearly can't afford and giving the beleaguered taxpayer the bill.  WTF?

Deep Snorkeler Nov 9, 2017 5:02 PM Permalink

Deep Thoughts About Taxes1. Stupid, horrible tattoos should be taxed heavily2. The bottom 60% of Americans should be sterilizedand receive a tax credit.3. Working robots should be taxed4. Groped women should receive a tax credit5. There should be an obesity tax for every pound over standard

nomad943 Nov 9, 2017 4:58 PM Permalink

I dont know why this proposal is being so undersold. It really is a good piece of legislation. With the spending cuts alone the deficit will ... what? There are no spending cuts. They are going to increase spending while cutting taxes again? Are you flipping kidding me? Who would be that stupid? I am just disgusted.

HenryJ Nov 9, 2017 4:38 PM Permalink

Before any law is passed it should be shown to be constitutional by stating the section and verse that authorizes such action. So too should the threshold be high requiring justification before any tax dollar is taken from free men and women. What we have now is a government that feels they have the authority to interfere in the liberties of free men and women simply on the basis of obtaining a majority vote in congress or the stroke of an executive pen. And with that they operate as if all of our money belongs to the government and they are simply there to decide how much they will allow us to keep each year. It’s the people who are supposed to be free to do, as they please, not the government.Free market capitalism is the economic system of free individuals. It is people deciding for themselves what they will sell or buy and how much they are willing to pay. It is free men and women in charge of their own labor. It is not, as it has come to mean, the freedom to ask the government’s permission.Greed is not expecting to keep what rightfully belongs to you. Spending other people’s money is not compassion. And the fact that you need something does not entitle yo...u do someone else’s money. Although we have progressed to understand that slavery is evil we have sadly turned to democracy as the rationale for an all powerful and meddlesome state. But freedom demands responsibility. Too many are not prepared to accept the consequences of responsibility. So we pass laws to eliminate those ugly aspects. But responsibility cannot be eliminated; it can only be transferred to other people. Guess who those peopleWe began with a republican form of government. We have devolved into a more democratic and now bureaucratic one. The Founders gave us a republic that recognized that ultimate sovereignty resided in the people as individuals. First came rights and then governments were formed to protect those rights. This understanding has been put aside in recent years as ‘we the people’ has come to mean that what the people want as a majority, they are to receive. This has further devol...ved into our majority body, the congress, delegating its authority to bureaucratic entities that are far removed from the form of government we were given.The constitution is the law that governs the people who govern us. It is a very undemocratic document. It puts up roadblock after roadblock to make it difficult for new laws to be passed. It even says, as in the case of the Bill of Rights, that there are things that government cannot do even if the people are in favor of it. It is meant to restrain government for the protection of individual liberties. Majorities are no more a guarantee of liberty than dictatorship. Tyranny of a majority remains tyranny. The first step to restoring our constitution and our republic is to make sure that those who swear to support and defend it actually follow it. 

incharge1976 Nov 9, 2017 4:37 PM Permalink

Thought I'd post this here since it's big news... For several weeks True Pundit has hammered U.S. District Judge Tanya Chutkan including her blatant conflicts of interest in the Fusion GPS case.On Thursday the United States District Court for the District of Columbia re-assigned the Fusion GPS bank record case to a new federal judge, removing Chutkan from making any additional decisions on the case. This is highly unusual move but in this case quite necessary.Chutkan was presiding over a case that could implicate Barack Obama. She donated campaign cash to Obama. After his election, he appointed both her and her husband as judges. Other family members also contributed to Obama’s political coffers.The mere fact that Fusion GPS’ bank records could implicate Hillary Clinton and her former boss Obama is reason enough to believe Chutkan would opt on the side of The Swamp, in an effort to further protect Obama and his cartel which at this point may or may not include the federal judge who should have recused herself from the case.Just days ago the Obama crony helped Fusion GPS seal their financial records to keep its clients secret, after Congress subpoenaed the records. http://truepundit.com/payback-crony-obama-judge-gets-booted-from-fusion…

shankster Nov 9, 2017 4:10 PM Permalink

3 reasons for The Fed and the IRS.. they keep the power in Wash DC and this allows Wash DC to retain control over the masses, while enriching themselves and their powerful cronies.

shankster Nov 9, 2017 4:05 PM Permalink

If there are any Repubs and Dems that have two brain cells left to rub together..they should realize that both political party's are the same. The problem is Washington DC.

issimo Nov 9, 2017 3:57 PM Permalink

Here you go America!  More government goodies, and new massive tax breaks, and almost no one's entiitlements are touched, and it won't even break the bank!  Why?  Because the bank was broken years ago, and we are now operating in a 100% fantasy, "la, la, land" where everything is possible because nothing is real.  Forget free lunch - today, in the fantasy world of American politics, everything is free!  Yeah...can we all have a pony too??!

Endgame Napoleon issimo Nov 9, 2017 4:31 PM Permalink

No, everything is free for those who do the noble act of having sex and creating multiple humans to compete with robots for future jobs. It is all about career moms, working PART TIME, dead-end, two-bit jobs, who need child care, even though the kids’ grandparents do it in a huge number of cases.

Pay more $9-per-hour daycare workers to raise the children whose grandparents don’t raise them so that mommas can work $10-per-hour, part-time jobs. Sorry fake feminists: I mean CAREERS.

Why is momma manager spending half the day, planning the next baby-mommy-look-alike-bulletin-board-decorating contest? Why does the nutty employer prefer a building full of moms—taking mornings, afternoons, days and weeks off for kids—even though they do not meet the quotas and leave work every afternoon at the time of day when the most paying customers are forced to wait due to their absenteeism?

Because, he can pay part-time working mommas with unearned income from spouses or from monthly welfare and $6,269 child tax credits hardly anything. That’s why.

In reply to by issimo

BetweenThe Coasts Nov 9, 2017 3:51 PM Permalink

End the taxes ripoff. Stop borrowing dollars into existence from banksters. Print enought at begining of year to pay federal expenses and limit Federal expenditures to 5-10% of Gross National Product  and never ever a bigger percentage. Get thirdparty verification of that Gross National Product number. Dollar would then be a reflection of the vibrancy of the economic productivity of the country and would rise and fall in value and so would size of Federal government.

SumTingWongJr Nov 9, 2017 3:35 PM Permalink

Where are the spending reductions ?  We can cut 50-70 % of all government workers in DC and not notice any change in service.They are alll on their PCs watching porn or on eBay or amazon all day anyway.

richsob Nov 9, 2017 3:27 PM Permalink

It's starting to get real fuckin' hard to be a Republican anymore.  Maybe we should just rename the Republicans the "Oligarchy Party" and I can go find another party that has some sanity. 

Endgame Napoleon richsob Nov 9, 2017 4:20 PM Permalink

The Democrats can be the Fake Feminist or the Womb-Productivity Freebie Party. It all leads to the same end, with both sides of the Uniparty throwing money to their favored groups of serfs through the tax and welfare systems as a cover for their real objective: the lucrative globalist policies that enrich them and theirs. About the only difference is that Democrats will oppose things like the estate tax, a windfall for womb productivity for the aristocrats. Republicans will also add more tax-code welfare—child tax credits—which are issued in much bigger, lump-sum checks for parents to spend on any self-indulgent thing they want, while Democrats will call for more food stamps or medical care for the “working families.” Neither party does one thing to make conditions better for citizens who do not get any of that unearned income from government for sex and reproduction. In fact, their policies make the work scene worse, because by tying all of this welfare and tax-code welfare to moms and reproduction, they have changed the entire nature of the workforce.

In reply to by richsob

richsob small axe Nov 9, 2017 6:04 PM Permalink

I've been an optimist my whole life.  I'm a vet.  I pay my taxes.  But I'm worn out with the whole thing.  Now I'm a fatalist.  I don't think this country will survive the Free Shit Army, all the illegals, all the nut cases killing people on a regular basis, government spying, taxation, runaway government spending, etc.  A catastrophic natural disaster or a really horrible terrorist attack would give the Feds the excuse to do things to our society that we could never have believed. 

In reply to by small axe

skipweston Nov 9, 2017 3:25 PM Permalink

"Senate GOP Unveils Tax Proposal: Delays Corporate Rate Cut, 7 Tax Brackets, Repeal SALT Deduction"

The GOP Swamp People are desperate to pass this worthless TAX Reform Bill to appease their constituents. But the Trump Voters see through their smoke & mirrors. The swamp will be drained during the 2018 Midterms.

Cautiously Pes… Nov 9, 2017 3:24 PM Permalink

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

Endgame Napoleon chunga Nov 9, 2017 4:08 PM Permalink

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.

In reply to by chunga

Quivering Lip Late onset ADHD Nov 9, 2017 3:36 PM Permalink

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

In reply to by Late onset ADHD