by Countable | 11.2.17
House Republicans unveiled their tax reform legislation on Thursday — the Tax Cuts and Jobs Act — marking the official step in the process of delivering on cornerstone of the Republican Party’s policy platform.
While there’s a lot more work to be done in Congress before the legislation becomes law, starting with a planned markup hearing in the House Ways and Means Committee on November 6, after which the Senate Finance Committee will release its own proposal. Here’s a look at what’s in the House bill now:
The current seven tax bracket tax code (ranging from 10 percent to 39.6 percent) would be consolidated into five brackets, with the lowest starting at 0 percent to reflect the increased standard deduction that’s $12,000 for individuals and $24,000 for married couples filing jointly:
The 0 percent bracket would apply to income up to $12,000 for individuals and $24,000 for married couples filing joint returns.
The 12 percent bracket would apply to income from $12,000 up to $45,000 for individuals, and from $24,000 to $90,000 for married couples filing joint returns.
The 25 percent bracket would begin at $45,000 for individuals and $90,000 for married couples filing joint returns.
The 35 percent bracket would apply to individuals at $200,000 of incomes and $260,000 for married couples filing jointly.
The 39.6 percent bracket would apply to income over $500,000 for individuals and over $1 million for married couples filing joint returns.
Several tax credits and deductions would be expanded, preserved, or created including:
A new Family Credit would be created that includes an expansion of the Child Tax Credit from $1,000 to $1,600 to help parents with the cost of raising children. It would also include a credit of $300 for each parent and non-child dependent to help families with everyday expenses.
The Child and Dependent Care Tax Credit would be preserved to help families care for children and older dependents who need additional support.
The Earned Income Tax Credit would be preserved to provide low-income, working Americans with additional tax relief.
The deduction for charitable contributions would remain in effect.
Several tax tax credits and deductions would be modified or eliminated including:
The mortgage interest deduction would be preserved for existing mortgages and would remain available for newly purchased homes up to $500,000.
The state and local income tax deduction would be eliminated, while taxpayers could continue to deduct state and local property taxes up to $10,000.
The deduction for medical expenses would be eliminated.
The adoption tax credit would be eliminated.
The student loan interest deduction would be eliminated.
The Alternative Minimum Tax (AMT), which taxpayers must pay if their AMT tax liability exceeds their regular income tax liability, would be repealed.
The estate tax (aka the death tax) would be repealed after six years, and in the meantime the exclusion threshold would be increased to $10 million.
The gift tax tax rate would be lowered from 40 percent to 30 percent, with the basic exclusion of $10 million and the annual exclusion of $14,000 remaining at their current levels, indexed for inflation.
No changes would be made to the tax treatment of 401(k) retirement accounts or Individual Retirement Accounts (IRAs).
The corporate tax rate would be lowered from 35 percent to 20 percent starting in 2018. Personal services corporations would be subject to a flat 25 percent tax rate.
Businesses would be allowed to immediately write off the full cost of new equipment to improve operations and enhance the skills of their workers. They would also be able to continue writing off interest on loans.
The Research & Development Tax Credit would be preserved, as would the low-income housing tax credit that encourages investment in affordable housing.
The international tax system would be modernized so that American companies don’t face double taxation, and earnings could be repatriated at a reduced tax rate.
Incentives that reward companies for shifting jobs, profits, and manufacturing plants overseas would be eliminated.
Tax-exempt organizations like churches, charities, and foundations would have to comply with additional accountability rules.
What do you think of the House GOP tax plan? Hit the Take Action button to tell your reps, and share your thoughts in the comments below!
— Eric Revell
(Photo Credit: Gage Skidmore / Creative Commons)
Written by Countable
Why in the world would we funnel more money up the ladder, at a time of record wealth inequality. This is absolute nonsense.
You destroy healthcare. You raise our medical costs astronomically. Then you want to eliminate itemized medical deductions? It must be good to be rich and healthy.
I have significant medical expenses due to a (fortunately manageable) chronic condition and I own a home. If the proposed tax bill is passed it will cost me big - even doubling the standard deduction won't make up for it! This is a horrible tax code for a middle-class person like me.
I don't want my lawmakers to decide on a tax plan UNTIL Trump releases his taxes. He said he would but he L I E D! As usual with the moron.
Yet not for the same from Republicans. Caters to the rich and to corporations while screwing the 99%. This will increase my taxes clears as day due to the removal of the medical and student loans interest deductions being removed. So much for a tax cut, definitely a #TaxScam!
Just at first glance it looks like they give the low and middle income a break. Then in the second part they take it away. Corporations and the upper income seem to be taken care of.
Another attempt by the GOP to repay their wealthy owners, I mean campaign contributors. They’re afraid of the party more than their constituents because they don’t want to have to work.
This is horrendous. Why do businesses need a bigger tax break when they are already shafting employees? This is just a way for company owners to get a bigger bottom line. Also the unborn child language needs the chop, I will never support anti-abortion legislature until such a time women do not have to worry about the multitude of health issues and financial burden of having an unwanted child. The fact that a tax plan is trying to undo roe vs Wade is ludicrous.
This is a disaster. We must do everything in our power to stop this.
There are some decent elements here, but I don't appreciate cutting the deductions for adoptions and student loans. We should be *encouraging* people to pursue higher education and to adopt children whose bio parents can't care for them, and tax credits are a valid way to do this. I'm not entirely opposed to this plan but it does need some revision.
The GOP tax plan is a disaster for the average American. Have mercy y’all. Cutting taxes for the wealthiest and paying for it by cutting desperately needed funding for the elderly, sick, disabled, poor and youngest is unconscionable. You’re willing to take away medical and mortgage deductions? Childcare and dependent deductions? Y’all have forgotten who you’re supposed to be working for.
How does this effect the deficit? What does this look like in practice? I think the no tax deduction for medical expenses is wrong. Can’t get insured and now they won’t be able to get a tax deduction?
Doesnt go far enough. The feds have no constitutional authority to be administering student loans. As far as all the jealous “eat the rich” people, you do realize “rich” is classified as people earning more than $120k a year right? That most likely will include most of us in our lifetime if you got a job producing something of value.
Unfortunately I don’t see anything about the capital gain tax. Increase that to balance the reform and leave the local and state deductions alone. That if they truly want to help the middle class.
More greedy glutton republicans lying to the ppl . It is just unbelievable what republicans do to the ppl, but more unbelievable is the tax welfare for the wealthiest who need nothing. Tax cuts for the wealthiest is what republicans live for & lie for, every republican in office from coast to coast. Vote out all republicans, send them your healthcare bills& stop paying your healthcare premiums from coast to coast. Republicans work for their wealthy donors, religious crackpots & haters. What a disgrace to put Americans in more debt & raise taxes on the middle class to pay for wealthy welfare!! Omg! R u kidding me?
If a family of 4 will make $1000 more and a corporation like Walmart who even gets 15% MORE tax break, Walmart to whom we subsidized workers for not getting a living wage to their workers in 2015. $30,000,000,000 billion dollars subsidized on top of 600,000,000 on $30 Billion profits last year in these tax breaks if passed. How does your $1000 look? DONT BE FOOLED. let corporations get the same % tax break which is still A LOT OF MONEY. Or, better yet only give them a tax break if they create proven living wage jobs with benefits.
Eliminating medical costs while dealing with abolishing the affordable care act lets me know that Republicans don’t care anymore about their constituents. Health costs are rising and for many including myself, this is a major percentage of my monthly bills. I buy my own insurance which has gone up. I think should listen again to the Beatles taxman song. It’s now about them. Shame on you. Oh one more thing any of this affect the congressman and Senators who vote on this and their insurance and retirement etc. etc. If you’re going to drain the swamp make it equitable and begin with legislators getting whatever they vote on applies to them and their families.
I have 3 huge issues with this new tax proposal. First off, why would they eliminate the student loan deduction? Oh maybe it is because it isn't needed by rich families who don't need student loans to get their education! Student loan debts and interest are higher than any other debt and it is a crime that those loans are at 6.8% (on average) and the only people able to take the deduction are those that make less than $65,000 in the first place! Furthermore, the big banks got their bailout money at less than 1%! Why is our government punishing those who will contribute to the future of our country and with more disposable income can help our economy? Secondly, an individual making more than the $12,000, but less than $24,000 shouldn't have to pay taxes (only FICA). When have YOU ever tried to make it on $24,000 a year? My daughter, with a degree, makes this amount. She could not pay rent nor eat if she didn't have a roommate! As for myself, my new tax bracket would put me at 10% higher rate than before! This plan does NOT help the middle class! In my 55 years I have NEVER experienced the " benefit" of trickle down economics! Stand up for average people!
Paul Ryan is a fraud. He has no detailed understanding of policy. Although he pretends to be a policy “wonk”. This bill slams the middle class and makes the wealthy wealthier! How dare he and his fellow republicans lie and try to pass this off as benefitting the middle class. It will burden us with more taxes now and way into the future when the “giveaway to the rich” bill comes due. The poor will suffer and the wealthy benefit. And they WILL NOT reinvest and create jobs because they will invest in companies that make their money off of money and not productivity. Additionally, foreign investors who make up a large share of US investors will take their additional profits home with them so the lower taxes that will burden Americans will go right into foreigners pockets!! Make America Great Again, MY ASS!! Trump, Ryan and McConnell are liars and frauds!!!!!
Cancelling the state and local tax deductions immediately results in an effective double taxation and impacts 30 million citizens least able to withstand the effective tax increases. Throw this out with the rest of Ryan’s insensitive, oppressive, and inhumane proposals.