Here Is What Is In The Republicans' Final Tax Bill

On Wednesday, Congress Republicans were said to reach a deal on final tax legislation, clearing the way for final votes next week on a package that, if approved, would be sent to President Donald Trump to sign into law. While the formal language of the legislation has not been released, the following are the known provisions on which House of Representatives and Senate tax writers have agreed, based on Reuters reporting.

Here is a full summary of what we know as of this moment is in the Republicans' final tax bill:

BUSINESSES

  • CORPORATE TAX RATE: Falls to 21 percent from 35 percent. The House and Senate bills, as well as Trump, had earlier proposed 20 percent. Going to 21 percent gave tax writers more federal revenue needed to make the tax cut immediate. U.S. corporations have been seeking a large tax cut like this for many years.
  • PASS-THROUGH BUSINESSES: Creates a 20 percent business income deduction for owners of pass-through businesses, such as sole proprietorships and partnerships. The House had proposed a 25 percent tax rate; the Senate, a 23 percent deduction.
  • CORPORATE MINIMUM: Repeals the corporate alternative minimum tax, which was set up to ensure profitable companies pay at least some federal tax.

INDIVIDUALS

  • TOP INDIVIDUAL INCOME TAX RATE: Falls to 37 percent from 39.6 percent. The House had proposed maintaining the 39.6 percent top rate and condensing the current seven tax brackets to four. The Senate had proposed cutting the top rate to 38.5 percent and maintaining the seven brackets.
  • PERMANENCE: The expectation is individual tax rates will snap back to current levels in less than 10 years. The individual tax rates in the House bill were permanent. The individual tax rates in the Senate bill would have expired after 10 years.
  • STATE AND LOCAL TAX (SALT): Both the House and Senate had proposed scaling back a popular individual deduction for state and local tax payments by limiting it to property-tax payments and capping it at $10,000. The compromise bill is expected to keep that cap, but also allow for continued deduction of state and local income tax payments.
  • MORTGAGE INTEREST: Caps the mortgage interest deduction at $750,000 in home loan value, down from the current $1 million. The House had proposed a $500,000 cap. The Senate bill left it at $1 million.
  • ESTATE TAX: Roughly doubles the exemption from the federal estate tax on inherited assets to about $11 million, but leaves the tax in place, mirroring the Senate proposal. The House bill had raised the deduction, but also entirely phased out the tax.

OTHER PROVISIONS:

  • OBAMACARE MANDATE: Repeals a federal fine imposed on Americans under Obamacare for not obtaining health insurance coverage. The House bill did not repeal the Obamacare individual mandate.
  • ANWR DRILLING: Allows oil drilling in Alaska's Arctic National Wildlife Refuge. The provision was sponsored by Republican Senator Lisa Murkowski of Alaska.

Comments

Endgame Napoleon NickyGall Thu, 12/14/2017 - 09:12 Permalink

Looks like they removed the standard deduction thing that would provide just a few hundred dollars per year to those in the many states where half of the citizens live on less than $19 in per capita income per year, preferring to leave in the reduction in income tax for dual, high-earner couples, including all of these salaried couples who are not risking a thing to create jobs, but are taking two high-paying jobs with benefits out of the economy and putting that wealth under one roof.

I notice a lot of babyvacationing among that group, a lot of excused absenteeism, just like with the moms at the bottom of the wage scale who have spousal income or monthly welfare and child-tax-credit welfare covering their major household bills who dominate the vast majority low-paying office job slots at the bottom.

Assortative mating is a huge reason for the demise of the middle class; we would have a middle class TWICE the size if those good-paying jobs were spread out over the population. Another reason is the single moms, married moms and immigrants with a sole, male breadwinner who are willing to work for very low pay due to spousal income that covers major household bills or monthly welfare that covers rent and groceries and child-tax-credit welfare. Tax changes usually reinforce all of this rigging of the economy for groups with unearned income from government or concentrated, earned income from high-wage jobs.

Oftentimes, the exact same couples who dominate the few good-paying, salaried jobs have unearned income from estates, trusts and so forth. In fact, that is almost always the case. Few of them use infusions of unearned income from relatives to create businesses that employ citizens of the USA in the USA. Estates, too—like the dual, high-salaried couples—get a bigly tax cut that will likely add a chunk to the deficit, endangering programs that citizens with low wages must pay into at 7.65% of income or, if modestly self-employed, at 15.3% of income on every dime they earn, unlike the dual, high-earner couples and the wealthy heirs who only pay into SS up to the $127,200 cap.

I see no mention of the child tax credit, although the president was mentioning it on TV. If the omission is true, I am glad about that, being one of the [majority] of citizens who must survive on earned-[ONLY] income from low-wage, temp and high-turnover jobs, while citizens and noncitizens who irresponsibly have more kids than they can afford are [eligible] for free or subsidized housing, free EBT groceries, monthly cash assistance and a child tax credit check that, at the $6,444 max, equals 1/3rd of my yearly pay in some jobs.

Low-income moms OFTEN report spending those child tax credits on beach trips with boyfriends and other mom-pampering items. The expansion of that child tax welfare to include more parents with higher household incomes, including the many moms working part-time jobs to add luxury money to the household and driving wages down, is incredible. Giving them a cash windfall to spend on parent pampering if they choose is 100% unfair to millions of citizens who struggle to cover all household bills, including unaffordable rent, with NO unearned income from government and no spousal income.

I think the pass-through thing is good, especially since they clarify that it applies to sole proprietorships and partnerships. Maybe, all the 1099-gig workers out there, paying the twice-as-high 15.3% rate of SS tax and surviving on a hodgepodge of uncertain income streams, can designate themselves in that category, for once getting a tax break. Truly small, mom-and-pop and contractor businesses NEVER get a tax break, so that is the fairest part of this thing.

The elimination of the Obamacare mandate will save millions of single / childless citizens, noncustodial fathers and single moms with grown kids in states like Alabama, with its $18,189 per capita income, their measly tax return that, at $171 on average, is so low they could not cover a minor bill, like a car repair.

These are people who cannot afford rent when working full time, or whose rent takes half of more of their pay. If they get the EITC for individuals (without kids), they still could not cover even one major bill with their tax return, although single moms working part time to stay below the income limit for welfare get child tax credits up to $6,444, in addition to free rent and groceries.

This tiny Obamacare-mandate tax savings only applies in states that accepted the Medicaid expansion, but sure, low-income, uninsured citizens will be a tiny bit better off in terms of a few hundred dollars per year in tax savings, with a tiny amount of money that won’t go very far added to their household budgets.

Of course, many of them would be insured by [employers] who get $260 billion in tax exclusions if moms with spousal income and access to their spouse’s employer-provided insurance raised their own children, rather than taking jobs, often in discriminatory offices that staff with 98% mom workers who back watch while taking an absolute ton of time off for kids, to make keeping-up-with-the-Jones’ money.

Small employers, many of whom hire almost entirely married moms with spousal income that pays the rent, divorced moms with child support that covers rent, single moms with monthly welfare and child tax credits, young people living with their parents and elderly people living on SS, paying them low wages and working them in a part-time capacity, will be better off without the Obamacare mandate.

I guess it is better than the country going broke due to an unfair tax cut that expands the deficit to the breaking point, but those of us who [voted] for a massive reduction in wage-cutting, welfare-boosted immigration have no faith that any jobs created by this tax cut will go to American citizens if something is not done about that.

And it really just looks like one more cash handout to very affluent people, many of whom have ZERO intention of taking a risk to create jobs, even part-time jobs for illegal aliens on welfare due to multiple, US-born kids.

In reply to by NickyGall

spiral galaxy macdavy Thu, 12/14/2017 - 08:08 Permalink

......and ALWAYS priced in to the positive! ....and ALWAYS positively priced into the same shit companies (AAPL, AMZN, etc). But looking forward to offsetting my waaaaay positively priced healthcare premiums with my itty bitty tax relief I'll be getting :-( .....and offsetting my ever increasing state & local taxes, fines, fees and tolls (check out the recent money grab in northern Virginia)!!

In reply to by macdavy

richsob Thu, 12/14/2017 - 08:13 Permalink

And just think: a week ago I complained how the bill was likely going to hurt me because of my special circumstances and all the morons swore it wouldn't do that.  The tax bill was going to be GREAT!  How the hell can people be so judgemental without knowing the facts?  I appreciate passion but being dogmatic is a waste of everone's time.  I voted for Donald but damn!  Where is this country headed anyway?  Now back to immigration control and build the wall?  Let's see if that happens.

hedgeless_horseman syzygysus Thu, 12/14/2017 - 11:31 Permalink

 Looks like I won't have to eat a MAGA hat. hedgeless_horseman   Ghost of PartysOver Apr 26, 2017 12:31 PM

 - Repeal 3.8% Obamacare Tax on Investment Income- End Alternative Minimum TaxEliminate Itemized Deductions Except Mortgage Interest and Charitable Contributions- End the Death Tax|- Small Business Owner/ Operators Eligible for Business Rate If those 5 items become law, I'll eat a MAGA hat.

In reply to by syzygysus

Pigeon Thu, 12/14/2017 - 08:16 Permalink

Look, I think this is moving the deck chairs. HOWEVER, if you're going to report on the tax plan, please try NOT to be Reuters and fail to include the DOUBLING of the personal exemption from 6 to 12 and couples from 12 to $24k.Otherwise, you're not only misinforming, you're feeding the "tax cuts for the rich" MSM horseshit.

Pool Shark Pigeon Thu, 12/14/2017 - 08:30 Permalink

But with the elimination of personal exemptions, it's a wash.
The only real benefit is the (slight) reduction in the rate brackets (which they STILL haven't published).
But, the AMT is still in place for individuals, so until we know what the exemption limits and tax brackets are, WE DON'T KNOW ANYTHING ABOUT THIS BILL!!!

In reply to by Pigeon

WeeWilly Pool Shark Thu, 12/14/2017 - 09:50 Permalink

Not a wash for me, Pool. Since I own my home outright, am healthy and live in a low tax state I have not had enough deductions to itemize for years. I pay out the ass. Doubling the standard deduction makes a whopping difference to me, something along the lines of $4000 less I will pay per year. Still not a fan of the bill, but there is a segment of taxpayers who benefit mightily. 

In reply to by Pool Shark

Cthonic WeeWilly Thu, 12/14/2017 - 10:51 Permalink

Maybe not for your segment, but a wash at best for anyone with two or more persons eligible for the 6d exemptions; that's a solid majority of households (2.54 x $4050).  Plus high tax jurisdictions continue to be rewarded, indirectly encouraging all jurisdictions to emplace high, yet federally-deductible, income-based tax loads.  Bill is favorable for the lower upper class in that it doubles the estate tax exemption but it doesn't address the difference between the liquidity/marketability of physical capital/wealth vs financialized wealth.

In reply to by WeeWilly

Pool Shark Cthonic Thu, 12/14/2017 - 11:06 Permalink

Exactly right, Cthonic.Between me, Mrs. Shark and Baby Shark, we will be losing $12,150 in personal exemptions. This more than offsets the $12,000 increase in the standard deduction, so it's a wash.But, the elephant in the room is still the AMT. If you are a 2-income professional family, TAX BRACKETS DON'T MATTER because you will be paying the AMT rate instead.So, unless they substantially raise the AMT exemptions, "Tax Reform" won't help working professional familes earning over $150,000 (or individuals earning over $75,000)

In reply to by Cthonic

Pigeon Pigeon Thu, 12/14/2017 - 11:38 Permalink

Look I don't doubt what either side says - upping the personal exemption helps/doesn't help. Depends on your situation.My point was only that provide the full story on the big bullet point items.Of COURSE all of this "tax reform" is a fat lie. The only reason the tax policy exists as it does it to reward and punish, and is probably the largest factor in the corruption of our government.Any taxes should be small, flat and "fair" - meaning everybody pays the same rate. Exempting, say, the first $50k of income for EVERYONE strikes me as part of the "fair" bit, so that those on the lower end don't crushed.

In reply to by Pigeon

VW Nerd Thu, 12/14/2017 - 08:35 Permalink

What about the doubling of the std deduction?  Child tax credits?? I was hearing about these and other changes for average working families, but did not see anything in the article.  Wonder if they got dropped from the final drafts.

syzygysus Pool Shark Thu, 12/14/2017 - 09:10 Permalink

THE CAKE IS A LIE!THE CAKE IS A LIE!THE CAKE IS A LIE!THE CAKE IS A LIE!  Roughly translates to "your promised reward is merely a fictitious motivator". Popularized by the game "Portal" (found on Half-Life 2's "Orange Box" game release for PC, X-Box 360, and PS3). During the game, an electronic voice encourages you to solve intricate puzzles using cake as a motivating perk. When you have "broken out" of the game's initial testing phase (from threat of death), you find scrawls on walls of the innards of the testing center warning you that "the cake is a lie".

In reply to by Pool Shark

Ikiru syzygysus Thu, 12/14/2017 - 12:02 Permalink

Lol!! My brother and I saw that while playing Portal. Funniest thing I’ve ever seen in a video game, since they set it up for so long talking about the damn cake you’re going to get. By the way, anyone who thinks ALL video games rot your brain ought to try playing this one. This one requires a high level of concentration and problem solving.

In reply to by syzygysus

Iconoclast421 Thu, 12/14/2017 - 09:06 Permalink

"The compromise bill is expected to keep that cap, but also allow for continued deduction of state and local income tax payments."

So its a big giant NOTHING. Complete failure of legislation that wont do anything. Not surprised in the least.

Next up: amnesty. Dont think for a frickin moment that it aint comin.

There Thu, 12/14/2017 - 09:47 Permalink

Fantacy Tax De-form bill. A fantacy dream come true for the super rich and cash bloated corporations.These Administration and Republican folks quickly try to pass this stinking garbage bill with no public hearings, no detail of contents, and plenty of blunders and unintended consequences. The smell will stick to them forever.These jokers try to pass a bill with no known particulars for no good reason other than their own self dealing theivery.What exactly are the exemption limits and tax brackets? No one knows. It is not a Tax bill. It's a fantacy bill to protect the donor class.

homonohumanus Thu, 12/14/2017 - 10:59 Permalink

Looking atthe Fed support for the plan, I start to wonder if all this jazz is simply about "buying" (again) the last vocal boomers while the final plundering of the left over of America is happening.I mean how can retirement works? How many out of the work force? How much does the average US citizen does? Can't be paid without taking a lot BUT a lot of money from the high class which has prepared against such eventuality for decades in many ways.Lowering twas will do what it always do accelerate the process of money and power concentration.

overmedicatedu… Thu, 12/14/2017 - 11:24 Permalink

lol the progessives always cry, the rich are getting the lions share of the tax breaks..well duh they pay 70% of the taxes..fiat paper money give aways from your local central banks..is where the real crimes are done.6 trillion spent on bush's and obuma/hillary's mideast wars..never to be spent here..Trump did let that cat outta the bag..progessives somehow never hear that..wonder why??