On Thursday, the House approved the Tax Cuts and Jobs Act with a vote of 227-205. The bill passed along party lines, with no Democrats voting in support of it.
The Tax Cuts and Jobs Act aims to simplify taxes for Americans, reducing the country’s seven tax brackets down to four. According to House Speaker Paul Ryan, the bill would save the average American household $1,182 per year on their taxes. If passed by Senate, the $1.5 trillion tax bill will result in the creation of 890,000 new jobs.
House Republicans have lauded the bill’s future impact, claiming that 90% of Americans “will be able to file their taxes on a postcard-sized form.” Additionally, the Tax Cuts and Jobs Act would reduce the corporate tax rate from 35% to 20%, promoting economic growth and bringing jobs back to the United States.
President Trump appeared on Capitol Hill encouraging Republican lawmakers to support the bill. “Taxes are going really well”, he told reporters.
With GOP leaders aiming to approve a final tax bill by the end of the year, all eyes are focused on the Senate. Senate Republicans have introduced their own version of a tax overhaul in recent days, with several differences from the House version– including keeping more tax brackets, reducing individual tax rates, retaining the estate tax at double the allotted exemption, and phasing in a corporate tax cut over several years. .
Most importantly, the Senate version of the bill also repeals the individual mandate put in place by the Affordable Care Act. Senate Majority Leader Mitch McConnell explained that including the individual mandate repeal in the tax overhaul bill would garner support from Republican members as they aim to mitigate the harmful effects the tax has on lower income and middle income families.,
“We’re optimistic that inserting the individual mandate repeal would be helpful,” McConnell said.
The Joint Committee on Taxation has released a preliminary report of the distribution effects of the bill, which can be read here.
“Passing this bill is the single biggest thing we can do to grow the economy, to restore opportunity and help those middle-income families who are struggling,” House Speaker Paul Ryan said in a recent statement.
Some Republicans are skeptical of the bill, including Senator Susan Collins (R-ME). As a more moderate Republican, Collins has expressed concerns that the repeal of the individual mandate was an unwise decision. “I personally think it complicates tax reform to put the repeal of the individual mandate in there,” Collins explained, worrying that the alteration would only end up increasing health care premiums for many Americans.
Democrats across the board have been highly critical of the bill since it was first introduced, calling it a scam and claiming it will only harm the middle class while serving corporations and big businesses.
“Now the ball is in the Senate’s court,” Vice President Mike Pence said after the House vote, “the next few weeks are going to be vitally important and they’re going to be a challenge.”
Early Friday morning, President Trump tweeted, “If Democrats were not such obstructionists and understood the power of lower taxes, we would be able to get many of their ideas into Bill”.
The president later tweeted, “If we get Tax Cuts and Reform, we’ll really see some great results.”
The bill is expected to be considered on the Senate floor the week after the Thanksgiving recess.
Paul Ryan, President Trump need to pass the anti- double tax on Social Security and pay a refund for collecting it in the past. This is so wrong that it isn’t worh talking about. It would be unlawful, without the blurb, Congress added to it.I guess you could call it outragious. So this is the first thing you can do,when you get back from your vacation, is make this right, you all know it is wrong and just makes things harder on the elderly and all the Social Security Recipients. Thank you, Paul and Mr Trump!!
I don’t understand why the powers that be boast about doubling the standard deduction but fail to mention the elimination of personal exemption. My wife and I are retired seniors with low income, high medical expenses, and the loss of the exemptions adds over $9,000 to my taxable income, causing my Federal taxes to go up 70%. How come no-one in Washington caught this. This puts an additional tax burden on that part of the population which can least afford it. Calls to Paul Ryan are not returned. I am trying to find an effective way to get the word out.
Thanks
Art Rasmussen
Writing off property taxes at the end of the year is cruscial to the middle class. We need that!
Over all the tax cuts act looks good, the government has to pay down the debt or the US could cease to be in the near future. So some people in the high tax states will lose out, it just mean they will have to end their high price projects and come to terms of what really matters while making their legislators aware of their frivolous spending agendas. Many of us have to live within our means, why should governments be exempted.
One nice thing about this current package is the repeal of the Obumbercare mandate. RINO’s like Collins can take a hike, private organizations can do a much better job. But I fear that the most significant reforms of this bill will get watered down once it passes through the legislative sausage factory, just not enough real conservatives on the hill.
Whatever happened to the real reform like flat tax. Tired of those who pay nothing but get a tax return anyway…….tired of paying through the nose for those who abuse the system…..I want to see real reform and that includes cutting government all abuse of our tax money……..cut welfare, food stamps, taxpayer funded housing etc…….don’t hear about government spending less as part of the equation
The liberals will always be against anything
Done under the Trump administration GOOD
Or not unless their brains are readjusted!!!
They don’t care about the issues. Or what’s good for America! Only getting revenge!!
God help us and let Truth Prevail!!?
All the high tax states are democrat, why should we rebate there taxes at our cost? If we stop the rebates you will have less democrat’s in those states.
Just eliminating all illegal tax payments would be a big help in bringing down costs to the rest of us.
I think that the “rinos” inserted the individual mandate into the tax bill in order to be sure it would not pass the Senate….this is to solely humiliate President Trump and to hell with the nations needs !!
As soon as does pass a bill on taxes and it get the final draft for the president to sign on a page in the middle of the bill it will say that a tax will be on the services and items that medicare pays for. Remember they tax social Security now.
The GOP tax plans, while doing some good (i.e., reducing corp & pass-through tax rates), also contain suicidal, ultimately fatal provisions.
The House Bill would take about 10MM people OFF the taxpaying rolls (the Senate Bill would take off about 5MM). This would make even worse, the situation today in which only 48% pay ANY Income Tax (IT) and the top 20% pay an astounding 93% of all the IT, while earning only 60% of the income.
The GOP Bills would make taxpayers and even smaller, indefensible, permanent MINORITY.
Yes. An ever shrinking minority being systematically bled dry to prop up a fundamentally flawed progressive tax system. That is what you get when the RINO faction of the GOP is in charge of writing tax reform legislation. The insanity around the child tax credit is a prime example. Both houses of Congress dueling over who can jack up the deduction the most. The House proposal is to hike it 60 percent. The Senate says not enough. Let’s hike it to 80 or 100 percent Macro Rubio says. However the CTC does nothing to drive economic growth, business expansion or make our economy more competitive on the world stage. Just pandering for votes. Whatever happened to the notion if broadening the tax base? Instead what we get is the opposite.
Tell susan collins that the mandate hurts the people who make the least. It is taken out of any refund they may get that the use to catch up on bills they are unable to pay during the year. The mandate is taking a good portion of their refund. Also, if you make less than $12,000.00 a year you can’t buy ACA insurance. But you also make too much to get medicaide. So you can’t get coverage but you are forced to oay the penalty.
If the Republicans in the Senate fail to pass a
Similar bill to the House bill I think that there
Is a good chance that they will lose-their
Majority in the Senate Removning the man-
story provision for health Insurance will be a good idea
Why do people who don’t pay income taxes get an ‘adjustment’ on their income tax form and receive thousands of dollars back in the form of cold hard cash? Whose paying for that? I’ll tell you who–the middle class
Why not increase these people’s taxes nominally (2-3%) so they have ‘skin’ in the game and do their fair share and help offset the the real tax payers—the middle class. I can hear the Dems howling now.
That with some real reduced govt spending seems to me could be the beginning of tax reform.
So why do I feel the middle class and seniors are getting the shaft again?
And Congress continues to enjoy their own special health care, self imposed pay raises, and apparent mutual admiration society with each other congratulating themselves that they got some thing ‘done’before their holiday ‘break. Give me a break….
The Senates bill in pretty much all ways sucks but the House bill should be passed as is.
Amac has a chance to act as the voice of reason. I was dumbfounded when AARP went on the record to endorse Obamacare. Now, with this “tax reform “, we seniors stand to be shafted again. If this tax bill provides for a set deduction and eliminates the already penalized deduction for medical expenses, those of us seniors with major or catastrophic expenses will be ruined. This is compounded by the threat to reduce medical cost support so that more money is available to cover the expenses of illegals and ne’er do wells. Our medical bills last year were over $22,000. Imagine if these expenses were $50,000. My personal savings would be gone in about three years. I want Amac to be steadfast with the goal in sight to read the fine print and come down on the side of our senior citizen interests.
Can someone please tell me why there cannot be a small tax increase on the low income families? Even 2-3% of their income? Why is it that these families pay no income taxes yet still get some type of adjustment on their taxes which allows for a ‘refund’ of thousands of dollars which they never paid into? Where is the ‘fairness’ of that for hard working families who pay much higher %of income taxes and find that when it comes to ‘refunds’ for them it is paltry at best? If you want to speak of fairness start there.
The rich have ways to avoid income taxes within the law and the poor have ways of getting refunds they never earned.
Looks the the .middle class is screwed again.
At least a 2-3% contribution by the lower in4come bracket would give them a little ‘skin’ in the game. And has anyone ever figured up how much that type of contribution to the tax bill would amount
to?
Isn’t that what the GAO is there for?
Scheeese!!
I agree almost completely with everyone. I am a 100% supporter of President Trump, and I consider my party affiliation to be Conservative. My profession is that of a certified public accountant (CPA.) People if the higher tax states will as everyone says will truly see an increase in the Federal Income Taxes. To feel that the other parts of the country are subsidized these taxpayers is not equitable. We have provisions for lower tax rates on capital gains, have special rules that benefit homeowners, and many other specific assistance tax deductions and or tax credits. Taxpayers in high tax states deserve consideration and some assistance as they have a heavy burden imposed on them by almost entirely by almost 100% Democratic and Liberal state governors and legislators. These taxpayers have no control over their governments. Punishing the individual taxpayers will only place a greater tax burden on them. The governments in those high tax states could care less about their residents and will never lower the tax rates. I believe that the state and local tax deduction for those who itemize their deductions is an essential means of assistance just as any of specifically targeted deduction available. Let’s not punish the taxpayers in those states as the Liberal Democrats in charge are already punishing them enough. Moving to another state is not an easy option.
For the rest of us to subsidize them does not seem fair.
As someone who lives in a deep blue state, New Jersey, and is both a fiscal and constitutional conservative, the argument that other states have to subsidize residents of blue states, because a majority of those state’s residents are stupid and keep electing progressive Democrats who only know tax and spend just isn’t a very compelling reason for people from other, better run states. As a CPA, you know that no one wants to hear they have to support the bankrupt neighbor next door, simply because they continually waste every cent they earn and max out their credit cards each and every month. The same principle applies to well run states versus poorly run states.
You say residents of blue states have no control over their governments, but that isn’t quite right. The people of my state or any other blue state could stop the runaway spending and taxation at any time. They just have to stop being stupid and electing Democrat politicians that promise an array of “free stuff”. In New Jersey, we just elected a progressive Democrat as Governor, who ran on the exact same socialist policies that Bernie Sanders ran on in 2016. Exact same. Anyone with even a small amount of economic sense would realize his 19 point plan is economically ruinous. Yet he won by more than 20 points over the Republican candidate. She didn’t promise lots of free stuff, just responsible, less wasteful government.
The ONLY purpose of the income tax is to fund the constitutionally authorized areas of the federal government. Period. The notion that the income tax should also be used for social engineering purposes and to pick demographic winners and losers is how Progressives view the goals of tax policy. Which is why our federal tax code as ballooned over the last 100 plus years into the 70,000 page monstrosity of incoherent rules and guidelines that it is today. Granted the so-called tax reform on the table does not do any of that, but that is only because the RINO’s leading this effort are neither fiscal conservatives nor willing to change the progressive status quo. They like things just the way they are.
Just tax everyone, businesses and individuals, at a flat rate of 15 percent and scrap almost all the deductions and carve outs after raising the individual exemption to a higher level than what Congress is currently proposing. Much more equitable to everyone. That is what Art Laffer wrote for Trump as his tax reform plan. As a CPA, you know Laffer is no slouch. There are no spending cuts in the 47 trillion dollar, 10 year budget Congress just passed. That is how you “pay for” tax cuts. Reduce the size and scope if the federal government to what the amount of total collected tax revenue will support. By reducing the amount of federal spending. Not by playing these who gets which deduction based on who the weak-kneed politicians think will give them more votes nonsense. Almost none of the members of Congress are what we would refer to as economically literate. That is not their skill set. Congress screwed up this chance at real tax reform when they passed the 10 year budget with NO spending cuts. That painted themselves into a very small box, which is why both the House and Senate versions are a mess.
Again, we have to stop using the federal income tax code as social engineering policy. If blue states want to continue to be stupid and keep electing Dems who promise lots of free stuff, the people that actually pay those ludicrous high taxes will continue to move out. Just look at all the high net worth individuals and businesses that have fled the high tax blue states over the last 5 years. That trend will just increase as Democrats scramble to find someone / anyone able to be bilked to finance their liberal nirvanas.
Now thats a comment that AMAC should frame and present as a stand alone article to show without a doubt what a true fiscal conservative sounds like. An award winner, PaulE, and you should be proud.
I am honestly kind of surprised that it wasn’t censored with the dreaded “awaiting moderation” flag.
I just still find it so amazing that there are so many people out there who feel we, as a nation, have to tolerate over-taxation and overly-expensive and absurdly complex bureaucracies, because some people (ignorant, economically and scientifically illiterate liberals) in certain states that are dominated by such people (blue states that consistently vote for whatever the latest progressive Democrat tax, regulation or law sounds great at the time) are unable or unwilling to take personal responsibility for their own poor decisions and live with the outcome of their actions. The argument of “They are too stupid to make intelligent decisions, so we, as a country, have to just tolerate whatever they vote for and be willing to pay whatever additional money it costs forever” is just such a lame rationale. Governing a nation based on the least intelligent and rational choices of certain citizens of that nation is not a recipe that ever ends well. But hey, that’s just me and I am well aware there are very few people that would agree with me in my state. That is evidenced by the fact that New jersey has been an almost solid blue state for going on almost 60 years now.
Yes, PaulE, and the fact that most of our founding generation were an elite group with titles of status and thousands of acres awarded by service to the prior king before Geo.III ascended the throne seems to make no impression on those who are universal suffrage advocates ( which really computes as Democracy). Why should anyone who was exempted from paying for or otherwise supporting the government be automatically allowed to vote themselves rewards as though they served?
Parasites have infested our nation, both at the top and at the bottom and so many fail to even recognise the danger that this poses against the foundation of liberty that resulted in the grand experiment that has been America.
We have become too large for Republican style governent alone, and too diverse; much too large to be solely a democracy which was understood by the founders to always ultimately fail. For reasons such as these (and our founders for the most part were reasonable men) we were provided a mixed form that attempted to utilize the best attributes of each, while allowing the individual State a real position of States’ soverignity and a say in the procurement of supporting taxation (no, there was no IRS).
What is really disturbing is that once The United States falls, there will remain no place left for future generations to go in order to regain our once sacred (yes, sacred, though no heaven on earth, the best and most free ever devised by man).
What remains is for us to continue in attempts to purge our governments, both State and local, of the likes of those who are destroying our central government. The old saw, “Birds of a feather flock together” will aid us in recognizing which ones are moving to join the club of rulers so we may better pick those who wish to serve and lead instead. But by and large, it will take extreme effort to inform a casually indulgent public. There is no other option. We either save this country or we join the serfs who will either perish or otherwise live to serve thei rulers.
While they are supposedly improving the tax code WHY DON’T THEY ELIMINATE THE INCOME TAX ON SOCIAL SECU RITY??
We old f+rts could use the extra money as medical insurance premiums continues to increase on an annual basis!!
Here’s the thing with Social Security distributions taxed by the IRS. It’s double taxation. We working stiffs are/were taxed by the IRS on our gross income before the deduction to Social Security. Thus the distribution you receive was already taxed as income when you first earned it. But, they consider the Social Security distribution as income and tax it again. Why? How did this come about? The 1993 Omnibus Budget Reconciliation Act (OBRA) increased the share of some Social Security and Railroad Retirement Tier 1 benefits that are taxable. Individuals have to pay taxes on their benefits if they file a federal tax return as an individual and their combined income exceeds $25K. If an individual files a joint return, they must pay taxes if they and their spouse have combined income of more than $32K. This was enacted by then President Bill Clinton. I favor a flat tax of 10% for EVERY tax paying entity. The tax return can be done a on a post card. But that will never happen because it will put a host of law firms and all CPA firms and their associated lobbyists out of business. I can’t prove it, but I suspect by the time all the deductions and tax avoidance loopholes corporations and the wealthiest of society enjoy would be eliminated through a flat tax, they would actually end up paying more taxes even if it’s only 10%. For corporations or business, it would have to be 10% of gross sales receipts, not the “gross” income that accountants manufacture by various expense offsets or tax avoidance income reduction categories. As for the lowest income level, 10% of nothing is nothing. So, they’d still pay nothing, BUT they would not be entitled to any refunds either. The only refunds would be to those who paid in more than 10%, but since it’s a flat tax, that theoretically shouldn’t happen. And, I like the idea of an investment account like 401Ks or the Federal Thrift Savings program replacing Social Security. All that money you paid into Social Security earned zilch point squat. I’m not a tax savvy person by any stretch of the imagination, but this is certainly my perception of the way things appear to work. Anyway, my original point is those of us that actually worked and paid income tax on the deposits to Social Security should not have to pay income tax again on the distribution when we retire. Those who never paid a dime into Social Security should not be receiving Social Security. But alas, all the handouts created through the decades that got tied into tax law have it so convoluted, that on an individual tax to income ratio, us middle class will always carry the greatest tax burden. Of course, all of that as my thoughts and a buck 25 or so might buy you a cup of coffee.
This income tax garbage can all be fixed in three words… “THE FAIR TAX” !!!
Please take time to learn about it at https://fairtax.org/toolbox