Tag: GOP tax cut for the rich

Precision sacrificed for speed as GOP rushes ahead on taxes

The following article by Erica Werner was posted on the Washington Post website December 10, 2017:

Now that the Senate and the House have passed two tax bills, there are some crucial differences they need to resolve in conference. (Video: Jenny Starrs/Photo: Melina Mara/The Washington Post)

Republicans are moving their tax plan toward final passage at stunning speed, blowing past Democrats before they’ve had time to fully mobilize against it but leaving the measure vulnerable to the types of expensive problems popping up in their massive and complex plan.

Questionable special-interest provisions have been stuffed in along the way, out of public view and in some cases literally in the dead of night. Drafting errors by exhausted staff are cropping up and need fixes, which must be tackled by congressional negotiators working to reconcile competing versions of the legislation passed separately by the House and the Senate. Continue reading “Precision sacrificed for speed as GOP rushes ahead on taxes”

‘Very, very scary’: 8.8 million Americans face big tax hike if Republicans scrap the medical deduction

The following article by Heather Long was posted on the Washington Post website December 10, 2017:

Randy Sherfy has lived in a traumatic care facility since a driver hit him when he was 41. Cecilia “Sis” Tunnell has Alzheimer’s and requires intensive care. Both would end up paying thousands of dollars more in taxes if the medical deduction goes away, their families say. (Sherfy photo courtesy of Joe Sherfy; Tunnell photo courtesy of Mary Pagel).

Anne Hammer is one of millions of elderly Americans who could face a substantial tax hike in 2018 depending on the final negotiations over the Republican tax bill.

In her retirement community in Chestertown, Md., it’s the big topic of conversation.

Hammer is 71. Like many seniors, her medical bills are piling up. There are doctor visits, insurance premiums, drugs, a colonoscopy, a heart scan, an unexpected trip to the emergency room that lasted three days, ongoing monitoring for breast and ovarian cancer that run in her family and the costs of medical staff at her retirement community. Her out-of-pocket medical expenses vary, but she estimates they are about $20,000 a year.

Under current law, she can take a big medical deduction on her taxes. Last year, she was able to reduce her total taxable income by $16,000 because of the medical deduction alone, saving her over $3,000 on her tax bill. Continue reading “‘Very, very scary’: 8.8 million Americans face big tax hike if Republicans scrap the medical deduction”

As tax plan gained steam, GOP lost focus on the middle class

The following article by Damian Paletta was posted on the Washington Post website December 9, 2017:

Now that the Senate and the House have passed two tax bills, there are some crucial differences they need to resolve in conference. (Video: Jenny Starrs/Photo: Melina Mara/The Washington Post)

The GOP tax plan on the cusp of becoming law diverges wildly from the promises President Trump and top advisers said they would deliver for the middle class — an evolution that shows how traditional Republican orthodoxy swamped Trump’s distinctive brand of economic populism as it moved through Washington.

The bill was supposed to deliver benefits predominantly to average working families, not corporations, with a 35 percent tax cut Trump proposed on the campaign trail as part of the “Middle Class Tax Relief and Simplification Act.” Continue reading “As tax plan gained steam, GOP lost focus on the middle class”

The Finance 202: GOP drive to repeal estate tax risks making its tax plan more unpopular

The following article by Tory Newmyer was posted on the Washington Post website December 8, 2017:

If you didn’t know better, you might think some Republicans were trying to see how low they can drive public support for their tax plan. 

House Ways and Means Committee Chairman. Kevin Brady (R-Tex.). (Reuters/Aaron P. Bernstein)

It’s already basement-dwelling, with lopsided majorities of voters consistently telling pollsters the GOP’s rewrite of the code will benefit the wealthy more than the middle class. On Thursday, 54 House Republicans banded together behind a push seemingly tailor-made to reinforce the suspicion. 

Their request, laid out in a letter to their leadership: to insist in conference negotiations on maintaining the House tax bill’s full repeal of the estate tax, rather than the Senate version, which doubles the current exemption to $22 million for couples.

“I get all the political arguments over, ‘Hey it’s an easier political deal to do it this way,’ particularly given the perceptions with the president,” Rep. Warren Davidson (R-Ohio), who organized the letter, tells me, referring to estimates that full repeal would save President Trump’s heirs $1.1 billion. “But the reality is, this is just a fundamental issue about, to me, a tax that seems immoral… It’s been a long-term Republican platform position. To me, it’s important to do the things we said we were going to do.” Continue reading “The Finance 202: GOP drive to repeal estate tax risks making its tax plan more unpopular”

If the G.O.P. Tax Plan Hurts You, Congressmen Say It’s Your State’s Fault

The following article by Jesse McKinley and Nick Corasaniti was posted on the New York Times website December 7, 2017:

Representative Tom Reed, left, was one of four House Republicans from New York to vote for his party’s tax plan. Credit J. Scott Applewhite/Associated Press

ALBANY — The five House Republicans have heard the calls for their heads, the references to them being traitors, hypocrites and worse for supporting a tax plan backed by their party, but harmful to the states they represent.

Not content to merely defend their votes, the five representatives from New York and New Jersey have begun a counteroffensive, seeking to turn the tables and blame state leaders for helping create high-tax environments.

“The problem is not the federal tax policy,” said Representative Tom Reed, a Republican who represents the struggling Southern Tier of New York, and voted yes on the House version of the bill in November. “The root cause of the entire issue is the tax-and-spend culture out of Albany that has created that burden on New Yorkers.” Continue reading “If the G.O.P. Tax Plan Hurts You, Congressmen Say It’s Your State’s Fault”

An Economic Sugar High

The following article by Andrew Soergel was posted on the U.S. News and World Report website December 8, 2017:

Many economists aren’t optimistic about the long-term implications of the GOP’s tax overhaul.

President Donald Trump and the GOP congressional leadership have pitched their tax package – the passage of which appears to be a virtual certainty at this stage of the game – as a sure-fire formula to propel
As recently as Wednesday, Trump was quoted during a Cabinet meeting as saying he sees “no reason why we don’t go to 4 percent, 5 percent and even 6 percent” gross domestic product expansion in the months and years ahead.

Economists have broadly doubted these claims – though few quibble with the idea that the GOP-constructed tax plan would have a modestly positive impact on markets and the economy over the near term. Analyses from the Joint Committee on Taxation, the Tax Policy Center and the University of Pennsylvania’s Wharton Budget Modelhave all predicted a final bill, in a best case scenario, would add a few fractions of a percentage point to the country’s GDP growth rate over the course of the next 10 years. Continue reading “An Economic Sugar High”

The GOP tax plan, state and local taxes deductions – and you

The following article by Capri Cafaro, Executive in Residence at American University, was posted on the Conversation website December 7, 2017:

The Capitol is seen at dawn on October 30, 2017, in Washington. Credit: AP/J. Scott Applewhite

While Washington is claiming victory, states are crying foul.

Late last week, the U.S. Senate passed its version of the tax reform package that cleared the House a few weeks earlier. Within the hundreds of pages of legislative language in each bill lay a number of provisions that have significant impact on state governments, including modifications to the state and local tax deduction.

Under current tax law, individuals who choose to itemize and deduct eligible expenses on their federal tax return are able to deduct state and local income, sales and property taxes. Both the House and Senate billseliminate the so-called “SALT deduction” for state and local taxes while capping the property tax deduction at US$10,000.

As a former Ohio state senator, I served on the Senate Ways and Means Committee for a number of years. I also went through five state budget cycles over 10 years. Because of that experience, I believe the federal changes to the SALT deductions will be detrimental to American families and have long-term negative impacts on balancing state budgets. Continue reading “The GOP tax plan, state and local taxes deductions – and you”

Tax Plan Aims to Slay a Reagan Target: The Government Beast

The following article by Eduardo Porter was posted on the New York Times website December 5, 2017:

President Ronald Reagan, with a replica of a federal income tax form, promoting his tax legislation in New Jersey in 1985. Credit Scott Stewart/Associated Press

It was the spring of 1985 when President Ronald Reagan first proposed to put an end to the state and local tax deduction. The idea was, to be sure, politically tricky. The provision had been around since the creation of the federal income tax in 1913, the budgetary expression of America’s celebrated federalism. As Justice Louis Brandeis might have put it, it was the federal government’s way to help pay for policy experimentation in the nation’s “laboratories of democracy.”

And yet to a Republican Party embroiled in a fundamental debate on how to shrink the government, it was an idea hard to resist: a direct shot at states’ capacity to spend. Bruce Bartlett, then a conservative tax expert who would go on to serve under Reagan and his successor, George Bush, estimated that without federal deductibility, state and local spending would fall 14 percent.

Nixing deductibility “threatens the political livelihood of spendthrift lawmakers across the nation,” Mr. Bartlett exulted at the time in an article for the Heritage Foundation. And it “would become more difficult for states to finance programs of doubtful benefit to their taxpayers by ‘hiding’ the full cost within the federal tax system.” Continue reading “Tax Plan Aims to Slay a Reagan Target: The Government Beast”

Conservative Groups Seeking Support for Tax Cuts Find It a Hard Sell

The following article by Jeremy W. Peters was posted on the New York Times website December 6, 2017:

So far, Americans for Prosperity and its field staff and volunteers have visited more than 41,000 homes and made 1.1 million phone calls. Credit Cassi Alexandra for The New York Times

MIAMI — A dozen high school students working for Americans for Prosperity, the conservative political network funded by Charles G. and David H. Koch, fanned out across the Little Havana neighborhood one day last week to make the case that the Republican tax bill was something to get excited about.

“We believe it’s time to fix our broken tax code and let families keep more of what they earn,” Barbara D’Ambrosio, a sophomore, dutifully told an elderly woman who answered the door in her slippers. After she finished her script, Barbara glanced up from the iPad she was carrying and asked if the woman would kindly call her senators to urge them to support the tax bill, which was hours away from being approved by the Senate.

The woman stared at her silently for a moment. Then she nodded, politely but unconvincingly. Continue reading “Conservative Groups Seeking Support for Tax Cuts Find It a Hard Sell”

Tax Plan Crowns a Big Winner: Trump’s Industry

The following article by Patricia Cohen and Jesse Drucker was posted on the New York Times website December 5, 2017:

A real estate investment trust helped rescue a stake held by Kushner Companies in 666 Fifth Avenue in Manhattan. Such trusts would get new advantages under Republican tax legislation. Credit Karsten Moran for The New York Times

After a frenzy of congressional action to rewrite the tax code, salesclerks and chief executives are calculating their gains. Business was treated with the everyone’s-a-winner approach that ensures no summer camper goes home without a trophy.

Some got special prizes. Cruise lines, craft beer and wine producers (even foreign ones), car dealers, private equity, and oil and gas pipeline managers did particularly well. And perhaps the biggest winner is the industry where President Trump and his son-in-law, Jared Kushner, made their millions: commercial real estate.

House and Senate Republicans, in their divergent bills, both offered steeply reduced rates to corporate giants, partnerships and family-owned firms across the board. But when it came time to eliminate special breaks or impose tighter standards, real estate was generally excused from the room. Continue reading “Tax Plan Crowns a Big Winner: Trump’s Industry”