Republicans roll out tax plan | Arkansas Blog

Thursday, November 2, 2017

Republicans roll out tax plan

Posted By on Thu, Nov 2, 2017 at 11:13 AM

House Republicans today revealed some parts of their tax legislation.

The big change is the reduction in the top  corporate income tax rate from 35 to 20 percent. (Most corporations don't pay the top rate now.) Other highlights:

*The proposal creates three new individual tax brackets — at 12%, 25%, and 35%. It would maintain a 39.6 percent rate on top earners  (I await an analysis. This could punish many lower and middle-income wage earners.)

* Standard deductions rise from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples.

* Gone is the itemized deduction for state income taxes, potentially a big loss for many in Arkansas, a state with a high income tax rate.

* The local property tax deduction will be limited to $10,000.

* The child tax credit is expanded from $1,000 to $1,600.

*The home mortgage deduction is preserved, but capped at $500,000 for new mortgages.

* The 401K deductions are preserved.

* It doubles the estate tax exemption (which would make it $10 million, or $20 million for a couple) and eliminates it in six years (a multi-billion-dollar windfall for the Waltons.)

This apparently isn't all the bill authors have in mind and there's yet been no analysis of the impact on different classes of taxpayers. Lobbies are already gearing up in opposition. Most seem to still expect the benefits to go disproportionately to upper-income people and for the proposal to increase the national deficit substantially. There's also fear that corporations will still have ample loopholes to exploit.

Also so unknown: Whether cuts are coming to Medicaid and Medicare, as widely expected.

The Democratic Congressional Campaign Committee started raising the alarm even before the Republicans released a summary of important parts of the plan:

“Whatever backroom deals Speaker Ryan and establishment Republicans cut to buy a few extra votes, at its core this tax plan is a scheme to raise taxes on middle class Americans in order to cut taxes for corporations and the very rich,” said DCCC spokesperson Cole Leiter. “Main street’s loss will be Wall Street’s gain if Republicans have their way, and the American people are watching closely as Rep. French Hill prepares to walk the plank on yet another unpopular bill that hurts the middle class.”
Then came Americans for Tax Fairness:

"Apparently Donald Trump wants to call this tax plan 'The Cut Cut Cut Act.' That's appropriate because they're cutting taxes for billionaires, cutting taxes for corporations, and cutting funding for Medicaid and Medicare to pay for it all. In the meantime, some middle-class families will likely end up paying MORE in taxes because of the loss of popular deductions, while corporations will get a multi-trillion dollar windfall. It's outrageous and immoral, and voters will hold them accountable for it" - Frank Clemente, Americans for Tax Fairness Executive Director
UPDATE: Buried in the bill also is a provision to make it clear churches can engage in partisan politics without losing tax exemptions for contributions. Common Cause raises the alarm.

UPDATE II: Here's a good list from Vox on tax cuts.

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