“Now you were all saying…” The Joint Committee on Taxation released a new analysis of the House GOP’s Tax Cuts and Jobs Act (TCJA) yesterday that estimates 8 percent of households would pay at least $100 more in taxes than under current law in 2019, while 61 percent would get a tax cut of more than $100. Twenty percent would pay at least $100 more by 2027, about one-third would get a tax cut of at least $100, and another third would see a tax change of less than $100.
"That you want to be free…” Senator Ted Cruz doesn’t like those JCT numbers, saying that raising taxes on people in states like New York and California would be “a mistake.” With Sens. Tom Cotton and Rand Paul, he’d finance the tax cuts by repealing the Affordable Care Act’s coverage mandate. House Ways & Means Chairman Kevin Brady says that’s still a possibility.
“You’ll come runnin’ back.” Speaking of numbers: Why do so many of the tax changes in the TCJA last for only a few years? NPR explains why provisions like a $300 credit for non-child dependents or the ability of businesses to immediately deduct the cost of their capital investments last for only five years, while repeal of the estate tax would be delayed until 2024: “The simple answer may be: just getting the math to add up.”
“I said you would...” Math aside, Republicans say pressure from donors is pushing them to ignore Democrats’ demands for changes to the TCJA. “"My donors are basically saying get it done or don't ever call me again," said GOP Rep. Chris Collins of New York. But Ron Wyden, the senior Democrat on the Senate Finance Committee, says Republicans are making a tax bill much harder for themselves by not including Democrats. At a Tax Policy Center event yesterday, Wyden ripped the bill as “crumbs for the middle class” and big tax cuts for business and the wealthy.
“You’re searching for good times.” In a nod to conservative groups, Brady says he may retain the tax credit for parents who adopt from foster care, internationally or through private domestic adoptions. A parent could take the credit, which was worth $13,570 in 2017, over five years. But the Club For Growth wants Brady and his colleagues to make much bigger changes. It wants Congress to cut taxes on incomes over $1 million, make it easier for pass-through businesses to claim a lower 25 percent income tax rate, and accelerate planned repeal of the estate tax.
“But just wait and see.” Brady told Fox News yesterday, "We'll bring [the bill] to the floor next week… Our goal is to pass it next week out of the House.” On the other side of the Capitol, Senate Majority Leader Mitch McConnell says Senate Finance Committee Chairman Orrin Hatch will roll out his tax bill by the end of this week; expect it to differ sharply from the TCJA.
“Do anything your heart desires…” The Committee for a Responsible Federal Budget sounds the alarm about the TCJA. The bill may satisfy budget reconciliation instructions by adding no more than $1.5 trillion to the deficit over the first 10 years. But CRFB says the bill would violate the "Byrd rule" by raising the deficit after that. As a result, it would require 60 votes to pass in the Senate.
“Remember I’ll always be around…” Fitch Ratings says the GOP bill’s tax cuts will not pay for themselves and add significantly to the long-term US debt. The agency raised its medium-term debt forecast as it expects Congress to pass some version of the TCJA. It says that while tax cuts "may lead to a short-lived boost to output,” they "will not pay for themselves or lead to a permanently higher growth rate…. [it] will be revenue negative, even under generous assumptions about its growth impact.”
“Like I told you so many times before.” Apple denies that it moved any of its operations from Ireland to the island of Jersey to avoid tax payments, as alleged in the Paradise Papers. Apple says it restructured itself in 2015 to preserve tax payments to the United States, not reduce them elsewhere.
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