Friday evening: Republicans revealed their big tax and prepared for a final vote this week. House Ways & Means Chair Kevin Brady and other Republicans signed a conference agreement on the GOP’s $1.46 trillion Tax Cuts and Jobs Act. That set the stage for final congressional approval this week. The bill would reduce the corporate income tax rate from 35 percent to 21 percent starting January 1 and repeal the corporate alternative minimum tax. It would cut individual income tax rates, trimming the top rate from 39.6 percent to 37 percent. Many pass-through businesses owners would be able to deduct 20 percent of their business income. Most individual tax changes would expire by the end of 2025. The bill also would repeal the Affordable Care Act’s individual mandate to purchase health insurance, retain the individual AMT, and exempt the first $22 million (for couples) from the estate tax.
Late Friday afternoon: Senator Marco Rubio got a modest expansion of the Child Tax Credit. To gain his support, conferees expanded the refundable portion of the child tax credit to $1,400. That’s $300 more than the Senate’s version. However, only children age 16 and under would be eligible for the credit, instead of 17 in the Senate bill. The Center on Budget and Policy Priorities finds that low-income working families still would largely miss out on the full CTC increase from the current $1,000 per child to $2,000.
Friday night: Senator Bob Corker agreed to support the TCJA. He had been the lone Republican “no,” objecting to the bill’s $1 trillion-plus increase in federal deficits over the next decade. The International Business Times reported that House-Senate negotiators added a last-minute provision to make it easier for some real estate investors to deduct 20 percent of their pass-through income. Among the likely beneficiaries, according to the IBT website: Corker, who owns substantial rental property through his own pass-throughs, and President Trump. Corker aides say he was unaware of the change when he switched.
Sunday morning: Treasury Secretary Steven Mnuchin makes a promise. In an interview on Face the Nation he asserted that thanks to the TCJA, 90 percent of Americans will be able to file their taxes on a post card, or a “virtual electronic postcard.” That’s because they’ll be able to take the bigger standard deduction—which the bill would set at $12,000 for individuals and $24,000 for joint filers.
Sunday morning: Bernie Sanders makes another promise. Sanders told Face the Nation that if Democrats regain control of Congress in 2018, they’ll move to roll back the corporate rate cuts: “We're going to take a very hard look at this entire tax bill and make it a tax bill that works for the middle class and working families, not for top 1 percent and large multinational corporations." Hard to imagine President Trump signing such a bill. But just as Republicans spent years trying to undo the ACA, Democrats are likely to do the same with parts of the TCJA.
Sunday evening: John McCain will miss the Senate vote. McCain, undergoing treated for brain cancer, will return to Arizona. Susan Collins remains uncommitted, but even without their votes the bill would pass the Senate.
All weekend long: Some Republicans in state governments worry. Some GOP leaders say the TCJA will have a negative impact on their states, making their budgets even more uncertain as tax collections sag. “We’re waiting to get excited about [the TCJA] it until we figure out what’s in it moving forward,” said Iowa House Speaker Linda Upmeyer in an interview with The Hill.
For two in Ireland, you do what you gotta do. An elderly Irishman and his male caregiver have decided to wed. Matt and Mike are not in love, and are not gay, but are best friends. Matt simply wants to bequeath his house to Mike, and doesn’t want Mike to pay a capital gains tax of 33 percent on the value of the property after he inherits it. Married people in the Republic of Ireland are exempt from the tax on items of inheritance from their partner.
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