Amid Roy Moore’s defeat and Donald Trump’s harassing tweets, let’s not forget Republicans are still trying to pass a $1.5 trillion tax bill that would create the most significant revision of our tax code in decades.
Alabama senatorial candidate Roy Moore was worth nothing more to the GOP than a vote for more tax cuts for the wealthy.
The election of Moore’s democratic opponent, Doug Jones, may be a setback for Republicans, but they’re determined to vote their tax bill into law by next week.
The committee charged with reconciling differences between tax bills that cleared the House and Senate is now one step closer to delivering the bill to President Trump’s desk after reaching an agreement to lower the corporate tax rate to 21 percent, and the top tax rate for families and individuals from 39.6 percent to at least 37 percent.
Many of the cuts would take effect in January.
Trump claimed Americans would see the change in their paychecks by February.
Tax experts know this plan is nothing more than payback to Republicans’ wealthy donors.
At the sole public meeting GOP lawmakers held about the tax plan’s reconciliation, Sen. Ron Wyden (D-Ore.) commented:
“This is the ultimate betrayal of the middle class.”
The potentially most problematic part of the tax bill is the provision to cut taxes on “pass through” entities–businesses not registered as corporations–such as law firms and doctors’ offices, worth $600 billion.
This alone could make it easier for companies to avoid taxes since it will invite people to recharacterize their income to take advantage of a 23 percent deduction.
Someone making $500,000, for example, would save $30,000.
The alternative minimum tax, originally eliminated, is returned–but with a catch. Designed to prevent the wealthy and corporations from avoiding taxes entirely, it nullifies a popular break for research and development expenses.
Those who make more than $1 million will enjoy a tax of cut $5.8 billion a year.
Gone is the alternative minimum tax worth $700 billion.
Gone is the estate tax worth $150 billion.
Over $200 billion in cuts will be put toward a provision allowing a greater deduction for dividends on foreign earnings.
Important state and local income tax deductions on which working Americans rely, however, will be eliminated.
The hardest hit will be builders, small business owners, residents of higher-taxed states like California and New York, the working poor, charities, and teachers.
Select state and local officials and performing artists will similarly be affected.
The bill also repeals the individual mandate required under the Affordable Care Act (Obamacare), expected to leave millions of American without healthcare.
And while public sector employees watch their incomes decline, corporations will be still be able to benefit from the same deductions they always have.
The non-partisan Tax Policy Center reports, after accounting for increased economic growth, this tax code will balloon the deficit $1.2 trillion.
According to the New York Times, by 2027, people earning between $40,000 and $50,000 will see a combined increaseof $5.3 billion in taxes.
Joseph Rosenberg, a senior research associate at the Tax Policy Center commented:
“By 2027, all that’s really left is a big corporate tax cut. This primarily benefits high-income people — people with a lot of capital income — shareholders, people who have capital gains dividends, and people who have interest income.”
Chambers from both parties need to vote again to approve the bill’s final compromise.
Since Doug Jones’s win on Tuesday, congressional Democrats urge their Republican colleagues to wait until Jones takes his senate seat before voting.
Republican leaders contend they already have the votes, but really can afford to lose only one, which they are close to doing.
Sen. Bob Corker (R-Tenn.) already opposes it.
Sen. Susan Collins (R-Maine) also has concerns about lowering the top tax rate.
Sen. Marco Rubio (R-Fla.) complained Republicans did not work hard enough to expand the Child Tax Credit.
However, neither Collins nor Rubio has admitted whether or not they would oppose the bill.
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