Tax Cut Passes, Millions Not Dead

So tax cut bill finally passed the House and the Senate and is headed to President Donald Trump’s desk to sign.

Not a single Democrat voted for the bill, House or Senate.

It’s not a perfect bill, but there are a lot of good features:

  • “Lower Individual Tax Rates. The framework lowers rates for almost every tax bracket. The current seven brackets remain, but with new, generally higher income thresholds and lower rates.” Here’s a table from Business Insider:

  • “Larger Standard Deduction. The standard deduction is almost doubled, consolidating the additional standard deduction and personal exemptions into one larger deduction. For married joint filers, the deduction will be $24,000; for single filers, it will be $12,000. The expanded deduction simplifies tax filing by cutting the percentage of tax filers who will need to itemize their deductions in half. Approximately nine of 10 taxpayers will simply claim the new standard deduction.”
  • Lowered corporate tax rate to 21% down from a highest-in-the-world 35%.
  • Short-term business expensing incentives:

    Temporary Expensing. The bill expands the current-law 50 percent bonus depreciation for new short-lived capital investments to 100 percent or “full expensing” for five years and then phases out over the subsequent five years. Expensing allows companies to deduct the cost of investments immediately and removes a current tax bias against investment.

    The bill also expands expensing for small businesses under Section 179 by raising the cap on eligible investment from $500,000 to $1 million. The phaseout increases from a $2 million cap to a $2.5 million cap on total equipment purchases. In 2022, businesses will no longer be able expense their research and development costs; this is a step in the wrong direction toward longer write-off schedules rather than toward expensing.

  • “For a vast majority of Americans, the Tax Cuts and Jobs Act will lower their federal tax bill in 2018. This is accomplished through lower tax rates, a larger standard deduction, and an expanded child tax credit. Most of the individual tax changes revert to current law before 2025 to meet political constraints and Senate budget rules. Although temporary tax policy is never ideal, the expirations give Congress an incentive to revisit the tax code in the coming years to provide more far-reaching and permanent reform.”
  • The hated ObamaCare mandate has been eliminated.

    • The not-great part:

    Many Special-Interest Subsidies Remain. A large subsidy for domestic manufacturing is eliminated, but most other credits and deductions marked for repeal in the original House bill remain in the conference report. Among the surviving subsidies are tax credits for electric vehicles, wind-energy production, energy-efficient buildings, historic rehabilitation, orphan drugs, new market investments, and employer-provided child care. The conference report also adds a new tax credit for employers who provide paid family and medical leave.

    The tax foundation estimates that taxes will go down for almost every household.

    The reaction from various businesses was swift: AT&T, Comcast, Wells Fargo and Boeing all announced they’ll be handing out raises and bonuses in the wake of the bill’s passage.

    Despite predictions to the contrary, America still seems to be intact and millions have not been slain in the wake of its passage.

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    This entry was posted on Thursday, December 21st, 2017 at 8:10 AM and is filed under Budget, ObamaCare, Republicans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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