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  • EnactedDecember 22nd, 2017
    The President signed this bill into law
  • The senate Passed December 2nd, 2017
    Roll Call Vote 51 Yea / 49 Nay
  • The house Passed December 20th, 2017
    Roll Call Vote 223 Yea / 201 Nay
      house Committees
      House Committee on Ways and Means
    IntroducedNovember 2nd, 2017

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What is it?

(Updated 12/16/17): This bill — known as the Tax Cuts and Jobs Act — would overhaul the tax code with the goal of reducing the tax burden on individuals and businesses. It would lower tax rates, double the standard deduction and increase the child tax credit, eliminate or cap certain deductions, and also reduce the corporate tax rate. The bill was amended from its original form by the Senate, which replaced the House-passed version in its entirety and made further amendments to it during floor debate before approving it. This summary currently reflects the final version of the bill reported by the conference committee.

Personal Tax Rates 

The current seven tax bracket tax code (ranging from 10 percent to 39.6 percent) would be revised, with all but two of those brackets being reduced slightly. The cuts would be temporary under the bill, sunsetting after 10 years unless they’re extended by Congress.

  • The 10% bracket would remain unchanged (up to $9,525 for individuals; $19,050 for joint filers).

  • The 15% bracket would be cut to 12% ($9,525 - $38,700 for individuals; $19,050 - $77,400 for joint filers).

  • The 25% bracket would be cut to 22% ($38,700 - $82,500 for individuals; $77,400 - $165,000 for joint filers).

  • The 28% bracket would be cut to 24% ($82,500 - $157,500 for individuals; $165,000 - $315,000 for joint filers).

  • The 33% bracket would be cut to 32% ($157,500 - $200,000 for individuals; $315,000 - $400,000 for joint filers).

  • The 35% bracket would remain unchanged ($200,000 - $500,000 for individuals; $400,000 - $600,000 for joint filers).

  • The 39.6% bracket would be cut to 37% ($500,000+ for individuals; $600,000+ for joint filers).

Personal Tax Credits and Deductions

Several tax credits and deductions would be expanded, preserved, or created including:

  • The standard deduction would be doubled to $12,000 for individuals and $24,000 for married couples filing jointly -- up from $6,350 and $12,700 under current law.

  • The individual mandate to buy health insurance imposed by Obamacare would be repealed effective in 2019.

  • The Child Tax Credit would be doubled from $1,000 to $2,000 to help parents with the cost of raising children. It would be fully refundable up to $1,400 and phases-out for families making over $400,000. Parents have to provide a child's valid Social Security Number in order to receive the credit.

  • 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 state and local property tax deduction would remain in effect with a $10,000 cap.

  • The deduction for charitable contributions would remain in effect.

  • The adoption tax credit would remain in effect.

  • The electric vehicle tax credit would remain in effect.

Several tax credits and deductions would be modified or eliminated including:

  • The mortgage interest deduction would be unchanged for all homeowners with existing mortgages, and for new mortgages the deduction would be available up to $750,000.

  • The Alternative Minimum Tax (AMT), which taxpayers must pay if their AMT tax liability exceeds their regular income tax liability, would remain in effect but the exemption amounts would be increased, while its thresholds would be phased out.

  • The deduction for state and local taxes would be capped at $10,000 and taxpayers could choose from sales, income, and property taxes to count toward the deduction.

  • The deduction for medical expenses would be available for medical expenses exceeding 7.5 percent of adjusted gross income in 2018 and 2019, which would rise to 10 percent beginning in 2020.

  • The personal exemption would be eliminated.

  • The $3,000 tax deduction for living expenses like meals and lodging incurred by members of Congress while away from their home would be repealed. (This provision was also introduced as a standalone bill, the SQUEAL Act.)

Other Personal Tax Provisions

  • The exclusion threshold for the estate tax (aka the death tax) would be increased to $11 million for individuals and $22 million for married couples.

  • 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).

  • Individuals would be able to rollover funds in a 529 savings plan to ABLE accounts, which are tax-advantaged for individuals with disabilities and their families.

  • The $3,000 tax deduction for living expenses like meals and lodging incurred by members of Congress while away from their home would be repealed. (This provision was also introduced as a standalone bill, the SQUEAL Act.)

  • Graduate students would continue to be able to exempt the value of reduced tuition from their tax liability.

  • The student loan interest deduction would remain in place.

Corporate Tax Provisions

  • The corporate tax rate would be lowered from 35 percent to 21 percent starting in 2018.

  • Pass-through businesses would have a 20 percent deduction for non-wage income under certain circumstances, reducing their effective marginal tax rate to no more than 29.6 percent.

  • 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 of 14 percent for cash profits and 7 percent for non-cash assets.

  • 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.

Other Provisions

  • This bill would open a portion of the non-wilderness coastal plain of Alaska’s Arctic National Wildlife Refuge to energy development, estimated to raise $1.1 billion in tax revenue over the 10-year budget window.
  • Revenue from offshore energy production would be temporarily increased for the Gulf Coast in 2020 and 2021 to allow states to invest in coastal restoration and hurricane protection.

Impact

American taxpayers; businesses; and the federal government.

Cost

The CBO estimates that enacting this legislation would increase budget deficits by about $1.46 trillion over the 2018-2027 period (not including the effects of enacting the legislation on the economy).

More Information

In-Depth: House Speaker Paul Ryan (R-WI) said of this bill:

“This is what the American people have been waiting for: more jobs, fairer taxes, and bigger paychecks. The conference committee took the best ideas from the House and Senate plans and made an even better bill. The Tax Cuts and Jobs Act is now only votes and a signature away from becoming the law of the land. This is the first major tax reform in a generation. It means relief for hardworking families and jumpstart for our economy. We're in the final stretch -- and we're ready to get this done for the American people by Christmas.”

The Finance Committee’s ranking member, Sen. Ron Wyden (D-OR), expressed opposition to this bill saying:

“Americans are learning how many tax promises Republicans are wiling to break, how many cons they're willing to run, how many hardworking families they're willing to betray to guarantee handouts to powerful CEOs and campaign donors. The country has been watching and protesting with anger as Republicans are now days away from passing their back door deal that digs into the pockets of the middle class to pay for massive tax breaks for multinational corporations. This is a historically unpopular bill that hikes rates on the middle class, leaves 13 million Americans uninsured and raises premiums for millions more.”

Earlier versions of this legislation passed the House on November 16 and passed the Senate on December 1.


Media:

Summary by Eric Revell

(Photo Credit: Xesai / iStock)

AKA

Tax Cuts and Jobs Act

Official Title

An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018.

    And “pay” for it by cutting government. Cut corporate tax to zero and businesses from ALL developed countries will flock here and create a boom the like the world has never seen. Trickle down is the ONLY way it works(for people who don’t mind working for a living).
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    There is no proof that by reducing corporate tax it will create jobs as the Republicans have stated. This is the same trickle down BS Regan used in the 80’s. It didn’t work then and it surely will fail now, it allows the rich to get richer and caused the middle class to brunt the loss.
    Like (1549)
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    This bill needs a lot of bi-partisan work to overhaul the tax code to lighten the burden on ordinary middle & lower class Americans, but this bill’s reforms would ONLY benefit the wealthiest Americans. It would add to the national debt which would give the Legislators the opportunity to get rid of Medicare, Medicaid and EVEN SOCIAL SECURITY, WHICH WILL LEAVE THE ELDER POPULATION IN POVERTY & DYING. There is not enough in this bill to help the lower & middle class. The bill actually takes away from the middle class.
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    No hearing. No expert testimony. No listening to the American people. That has been the story of the #GOPTaxScam.
    Like (654)
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    NO NO. NO NO NO NO NO NO NO NO NO NO. NO NO NO NO NO NO NO NO NO NO. NO NO NO NO NO NO NO NO NO NO. NO NO NO NO NO NO NO NO NO NO. NO NO NO NO NO NO NO NO NO NO. NO NO NO NO NO NO NO NO NO NO. NO NO NO NO NO NO NO NO NO NO. NO NO NO NO NO NO NO NO NO NO. NO NO NO NO NO NO NO NO NO NO. NO NO NO NO NO NO NO NO NO NO. NO NO NO NO NO NO NO NO NO NO. NO NO NO NO NO NO NO NO NO NO. NO NO NO NO NO NO NO NO NO NO. NO NO NO NO NO NO NO NO 😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡😡
    Like (422)
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    First of all, I know how complicated the tax code is. But everything in it is there for a reason, and quite a few were put in to promote things for the middle class, like IRA rules and mortgage deduction. If the bill is passed as currently written, the only ones to benefit will be wealthy American with a good percentage of middle class Americans actually paying more in taxes. Also, with high corporate rate cuts, the nation’s debt will only increase. I urge you to vote against this current bill.
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    This is the worst legislation to come out of Washington since I started voting almost 40 years ago. This bill will increase our already vast deficit, it will give money to the rich, take money from those who need it, this bill will interfere with a woman’s right to her own body, it will make Americans sick again. If you vote for this un-American bill, it shows you are a coward taking money from wealthy donors, plain and simple, Rob Portman and Brad Wenstrup. Plain and simple.
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    This bill will decimate the middle class. Please vote against it and tell all your friends.
    Like (225)
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    This adversely affects graduate students, especially those at private schools where the tuition is more than twice their salary. This bill will increase the taxes of a 28000 per year graduate student about 4 times (ie 3000 to 13000 dollars) because the tuition waiver will be considered as income (which is money we never actually see). We financially cannot afford that and many of us will be forced to leave graduate school early because we cannot afford the tax.
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    Yet another attempt to widen the gap between the haves and the have nots.the gop is willing to blow up the deficit to pay off their rich and corporate backers.later they will use the excuse that there is not enough money in the coffer to cut entitlements.ie.social security and Medicaid.
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    This tax plan is not in the best interest of the average person.
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    This bill is bull! It raises my taxes as well as 10s of millions. It is a total disaster for the northeast states - where 30% of the country live. If this bill goes through, we should demand that NJ does not pay the Fed Government tax bill, but rather withholds it so that funds are used in NJ’s favor, we need to stop being a donor state!!! Join me #BoycottTaxes
    Like (121)
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    Cut all taxes and get rid of the IRS! The corporate tax rate should be 15%. In fact, cut all taxes down to a 15% flat tax. Another idea is to reward tax breaks to higher educated people in addition to lower taxes. Competition brings out the best in people and an economy.
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    "Congress has passed the first overhaul of the U.S. tax code in more than 30 years. The Tax Cuts Act is a powerful symbol of what Republicans can accomplish when they unite behind a positive governing agenda for the country." "But this legislation isn’t about Republicans vs. Democrats. Rather, it’s an early centerpiece of the vision President Trump laid out on the campaign trail. Americans of all backgrounds want a government that’s more accountable, more democratic, and less eager to line its pockets with cash from taxpayers and small businesses." "Returning money from Washington to the people is the clearest sign our leaders can give that they take this responsibility seriously."
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    I hope my representatives will vote against this enormous giveaway to corporations and the ultra-rich. Everything I have learned about this tax "reform" tells me that it does nothing for the middle class and poor, except, perhaps, to do them harm. This does not serve the majority of the people and is a step toward an ultra-rich oligarchy.
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    As a special education teacher, with this new proposed tax plan I would not be able to buy school supplies for my classroom and deduct those purchases from my taxes. Yet big businesses that purchase supplies for their companies will be able to deduct those purchases. We all know funding and money is tight in our school districts and this is unacceptable. If I did not purchase extra supplies, my classroom would be out of things like pencils, folders, glue, markers, lined paper, etc., within three months. And I think if teachers are expected to be able to afford to do that (which we really can't, we just love our students), then big businesses should not be able to deduct it from their taxes either. Or MAYBE we can both deduct those purchases.
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    So we should expect the off shoring tax sheltering corporations to suddenly care about adding jobs if they get a little more money in tax breaks?! Small business creates the most jobs and get nothing from corporate tax breaks! It’s a trick to shift even more wealth to the top! Don’t fall for it!
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    I am so-o disappointed in you for at least 2 reasons: 1) you know the tax bill will help rich people/companies the most and 2) you are adding things to the bill that have not been able to pass before. Start being more ethical and honest.
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    Shame on Republicans for gleefully supporting their kleptocracy at the expense of the working poor and middle-class. Shame on the sociopath POTUS who needs to be removed from office for his mental illnesses Who is displaying more and more symptoms. Do not even think of cutting Social Security, Medicare, nor Medicaid. The majority of the American people now see what a travesty this bill is and sees the war against us. We could be a country that cares for each other, that cares for the planet that sustains us, and that displays integrity instead of the coarse , ruthless, hateful, hating country into which we have devolved. We can and must do better than this.
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    Trickle-down economics does not work. It didn't work in the '80's, and it will not work now.
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