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Thread: Republicans release their final tax bill — here's what's in it

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  1. #1
    Senior Member JohnDoe2's Avatar
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    Republicans release their final tax bill — here's what's in it

    Republicans release their final tax bill — here's what's in it



    Chip Somodevilla/Getty Images


    • Republicans on Friday released the final text of the compromise version of their massive tax bill.
    • The compromise bill, crafted by GOP members of the congressional tax committees, features a few changes from the House and Senate versions.
    • Republicans leaders want to vote on the bill as early as Tuesday.



    Republicans released the final version of their massive tax bill on Friday, setting up a frantic stretch to pass the plan through Congress next week.


    The bill is a compromise between the House and Senate versions and assembled by Republican members mostly from the committees that wrote them.


    The legislation would make sweeping changes to the corporate and individual tax systems. Here are some ways the bill is likely to differ from the House and Senate versions:


    • It would give corporations a slightly less generous tax cut. The corporate rate is likely to be slashed to 21% from the current 35%. The House and Senate versions had proposed 20%.
    • It would increase the refundability of the child tax credit. The bill would increase the child tax credit to $2,000 from the current $1,000, like the Senate version — but the level to which the credit would be refundable would increase to $1,400 from the Senate's proposed $1,100. That change is aimed at Sen. Marco Rubio, who on Thursday threatened to vote against the bill if the credit were not made more generous.
    • It would lower the top marginal tax rate: The bill would bring the top marginal tax rate down to 37% from the current 39.6%, but more generous than the 38% in the Senate bill.
    • It would adjust the individual tax brackets. The new brackets would be:
      • 10%: $0 to $9,525 of taxable income for an individual; $0 to $19,050 for married joint filers
      • 12%: $9,526 to $38,700 individual; $19,051 to $77,400 joint
      • 22%: $38,701 to $70,000 individual; $77,401 to $165,000 joint
      • 24%: $70,001 to $160,000 individual; $165,001 to $315,000 joint
      • 32%: $160,001 to $200,000 individual; $315,001 to $400,000 joint
      • 35%: $200,001 to $500,000 individual; $400,001 to $600,000 joint
      • 37%: over $500,000 individual; over $600,000 joint

    • It would allow people to count income or sales tax toward the state and local tax deduction. The House and Senate versions proposed people be able to deduct up to $10,000 in state property taxes from their federal tax bill. The compromise bill would allow people to deduct up to $10,000 in a combination of state and local property, income, and sales tax. It's unclear whether that figure is the same for joint and individual filers.
    • It would give pass-through businesses a deduction: Pass-through businesses like limited liability corporations in which the owner books the profits as income would be allowed to deduct 20% of their earnings. This is similar to the Senate bill, but down from that bill's 23% deduction. The benefit would also phase out starting at $315,000 for couples, down from $500,000 in the Senate bill.
    • It would double the threshold to qualify for the estate tax. It's currently $5.6 million. But the increase would expire, along with all the individual tax changes, in 2026. Many Republicans wanted to do away with the tax entirely.
    • It would not repeal the Johnson amendment. That prevents nonprofit organizations from donating directly to political campaigns, and the House and Senate versions called for repealing it. Critics had argued that would allow nonprofits to become de facto tax-exempt political organizations.
    • It would lower the threshold for the medical expense deduction for two years.The House version called for repealing the deduction, which allows people with medical expenses above 10% of their income to deduct costs beyond that. The compromise bill lowers that level to 7.5%. Sen. Susan Collins requested this change.


    Republican leaders have said they plan to hold a vote on the compromise bill early next week, with a goal of President Donald Trump signing it by Wednesday.


    Despite concerns over some members in the Senate, it appears that the Republican leadership has secured enough votes to pass the TCJA.


    Sens. Marco Rubio and Bob Corker said they would support the bill on Friday, after originally withholding their support from the compromise. Corker was also the only Republican to vote against the bill when it first came to a vote in the Senate.

    http://www.businessinsider.com/trump-gop-tax-reform-bill-final-text-details-brackets-rates-2017-12
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  2. #2
    Senior Member Judy's Avatar
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    That's pretty good! I liked Trump's plan better especially for the corporate and business pass throughs of 15%, but this should still make a big difference in our economy and job creation, help keep many of our companies and bring a lot who left back home. LETS ROLL AMERICA!! PRODUCTION!! PRODUCTION!! PRODUCTION!!!! JOBS! JOBS!! JOBS!!!

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    Senior Member Beezer's Avatar
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    WE WANT NO TAX REFUNDS TO ILLEGAL ALIENS!

    STOP THE IRS AIDING AND ABETTING ILLEGAL ALIENS.

    THEY ARE HERE ILLEGALLY AND SHOULD RECEIVE NO BENEFITS OF THIS COUNTRY!

    ANY ILLEGAL ALIEN FILING A TAX RETURN SHOULD BE HUNTED DOWN AND DEPORTED!
    Judy likes this.
    TO BECOME AN AMERICAN YOU MUST CHANGE YOUR VALUES ...NOT YOUR LOCATION

    STAY HOME AND BUILD AMERICA ON YOUR SOIL

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    Senior Member Judy's Avatar
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    The Administration can take care of it, quickly and quietly. They get it only because of a bad ruling by the IRS Commission. Trump will fix it, but not through Congress. He will do it through a regulation change after the new tax plan is in place.

    There should be no tax deductions at all for any illegal alien. Zero. If they own a house with a mortgage, they own it illegally. If they have a job they owe state and local taxes on, that job is illegal. If they have a kid in college with loan interest, that loan is illegal. If they have children in the US, they're illegal. If they have medical expenses, those are illegal. Any and everything they do here is illegal. No deductions for violations of law of any kind on any level. They aren't even supposed to file a tax return on income, if that income is illegal. All income earned here by illegal aliens is illegal.
    Last edited by Judy; 12-16-2017 at 02:06 PM.
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    Senior Member JohnDoe2's Avatar
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    ANYONE WHO VOTES FOR THIS BILL OR SIGNS THIS BILL IS AIDING ILLEGAL ALIENS.

    Trump will get tax cut bill with more generous credits for illegal aliens

    MW likes this.
    NO AMNESTY

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    Senior Member Judy's Avatar
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    All illegal aliens must be deported, removed from our premises, kicked out as single family units, no child left behind, mass deportation of all these whiners, moochers, thiefs, scammers, con artists, drug runners, scabs, drunks and killers. GET THEM ALL OUT. No exceptions, no excuses, no mercy.
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    Senior Member JohnDoe2's Avatar
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    DEC 19 2017, 9:18 AM ET

    Orrin Hatch ‘fesses up to special break in GOP tax bill that set off alarms

    by BENJY SARLIN


    WASHINGTON — Sen. Orrin Hatch defended a late provision he added to the GOP tax bill that could extend significant tax breaks to real estate companies, among others. The controversy threw a spotlight on one of the bill's largest and most complicated tax provisions, one where even small tweaks can affect large swaths of the economy.

    The Utah Republican's statement came after a wave of speculation that the benefit had been added to secure a "yes" vote from Sen. Bob Corker, R-Tenn., a wealthy real estate investor who has strongly denied any role in crafting the provision. Hatch said it was a product of House and Senate negotiations and had nothing to do with Corker, who had been on the fence before announcing on Friday that he was backing the bill.


    "Some have asserted that a new provision was crafted for real estate developers and was 'air-dropped' into the conference agreement," Hatch said, referring to the final bill. "Second, reports have implied that you (Corker) had some role in advocating for or negotiating the inclusion of this provision. Both assertions are categorically false."


    The measure's inclusion highlights an ongoing concern in every version of the tax legislation up to this point: Which industries benefit from a major new tax break — and which ones are left behind.



    Play

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    Republican tax overhaul: Who wins and who loses? 2:49


    These gaps stem largely from the bill's tax cuts for pass-through entities, a type of private business in which owners pay taxes on their profits as individual income. Examples include limited liability companies, S corporations and partnerships. They're subject to a different set of taxes than corporations, which are set to receive a simple cut to their tax rate.

    Thanks to the particular rules surrounding pass-throughs, wealthy architecture firms are singled out for big gains in the final bill, for example, but not in the Senate legislation. A small-town family doctor might qualify for a tax break in the final bill, but not a thriving upscale dermatology practice, and both would have been left behind in the House bill. And real estate companies, like those owned by President Donald Trump and his family, fare better in the final bill than they did in the Senate plan.


    "This is a place in the bill where you see really big differences depending on your sector of the economy and whether you're an employee or not," David Kamin, a professor at New York University School of Law, told NBC News. "They are distinctions that, to my eye, are hard to justify."


    These fights aren't likely to end with the bill's passage either. A group of 13 tax experts, including Kamin, released a report warning that the large disparities between businesses that would benefit from the final bill and those that would not are likely to spark a new wave of tax avoidance strategies. Industries left out in the cold might try to spin off parts of their companies to qualify or look to attach themselves to another company that meets the requirements.


    The main problem confronting lawmakers is how to confine tax cuts for pass-through businesses to actual businesses. The tax benefits are so significant that they create a major incentive for individuals to reorganize as pass-throughs to avoid paying income tax. This was a big problem in Kansas, where the state eliminated taxes on pass-through entities entirely.


    Both the House and the Senate included provisions to limit the gains and prevent certain professions from taking advantage, but they were complicated and produced large disparities between those who qualified and those who did not.



    Play

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    House Republicans expected to pass tax bill Tuesday 2:22

    The bill that passed the House would have lowered the top rate on pass-through income to 25 percent from 39.6 percent. The biggest gains would have gone to "passive" business owners, who play little role in the company they own, versus "active" business owners, who could pay the lower rate on just 30 percent of their income unless they showed they were especially capital-intensive. Further restrictions limited service businesses, like accounting and law firms, from using the lower rate at all.

    The rules would block a baseball star from putting his multimillion dollar salary into an LLC and getting the lower rate. But they also meant a billionaire who inherited a real estate company would get a huge tax reduction while a tiny accounting business would be left out.


    "In order to mitigate potential abuses, they've placed some guardrails, but those guardrails inevitably involve picking some winners and losers in the economy," said Scott Greenberg, an analyst at the nonpartisan Tax Foundation. "That's unfortunately going to be inherent to the policy design."


    In the Senate's case, its bill would have created a 23 percent deduction that pass-through entities could use. Service businesses were allowed to take the deduction this time, but they were blocked from doing so at higher incomes, where new restrictions kicked in.


    Sen. Orrin Hatch, R-Utah, speaks to reporters. Joshua Roberts / Reuters

    Past that threshold, the Senate bill required that qualifying businesses could only take the deduction on 50 percent of the wages they paid employees.

    Once again, the goal was to prevent wealthy people from reclassifying individual income without a real underlying company.


    The final bill hewed closer to the Senate bill, settling on a 20 percent deduction. But in negotiations with the House, some of its restrictions loosened up. Architects and engineers, who were excluded at higher incomes from the Senate version, were added in by name.


    And then there was the provision that set off alarm bells: The new bill offered an alternative way for larger businesses to claim the deduction by combining 25 percent of wages with 2.5 percent of depreciable assets.

    The change was especially beneficial to pass-through companies with few employees and lots of property, a combination that's common to the real estate industry.


    "It's not specifically intended to benefit real estate, although the way they’ve designed the provision makes it particularly favorable to real estate," Greenberg said.


    Amid blowback from Democrats, Hatch argued that the provision was conceptually similar to the House.

    Both included some measure, albeit different ones, that benefited businesses with bigger capital investments.


    While Congress is still debating which industries deserve the new pass-through benefits, it's a safe bet that tax lawyers will be arguing with IRS officials over how to interpret the complicated provision well into the future should the bill become law.


    "It doesn't look like we’re going to run short of work," said Don Susswein, a principal at RSM's Washington National Tax office.

    https://www.nbcnews.com/politics/con...alarms-n830931

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  8. #8
    Senior Member Judy's Avatar
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    They should have just made it easy and had a little provision that a self-employed, LLC, Sub S, or other type of registered company pays the lower of their personal income tax rate or the corporate rate. That protects small businesses and large ones who take on the risks of business regardless of what type of organizational structure they choose to operate with. But I'm okay with this change as it is. It helps the businesses a little bit, not as much as if they had the same rate as corporations, but a lot better than keeping it at their personal income tax rate.
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    NBC NewsVerified account @NBCNewsFollowFollow
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    WATCH: Protesters in the House gallery briefly disrupt tax bill debate before vote: "Kill the bill, don't kill us!"


    Trump will get tax cut bill with more generous credits for illegal aliens
    NO AMNESTY

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    Senior Member JohnDoe2's Avatar
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    NO AMNESTY

    Don't reward the criminal actions of millions of illegal aliens by giving them citizenship.


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