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The winners and losers in the GOP tax plan

Discussion in 'Politics and Religion' started by ATJ-Lucko, Dec 15, 2017.

  1. ATJ-Lucko

    ATJ-Lucko MMAtheist

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    The tax overhaul Republicans are poised to pass next week would usher in once-in-a-generation changes in how everyone from the biggest multinational corporations like Apple to middle-class workers are taxed, upending the long-established order on who pays more and who pays less.

    The tradeoffs, lobbying and special interests have allowed the bill to create a new set of haves and have-nots when it comes to the tax code. Here’s a look at who comes out ahead — and who loses out — now that the ink is drying on the details.


    WINNERS

    — Many people who work for a living, including the richest. The bill would cut individual tax rates and double the standard deduction to $12,000 for single people and around $24,000 for couples. That would mean a tax break for most Americans, at least in the next few years. Late in the game, GOP leaders cut the rate for top earners to 37 percent (from the current 39.6 percent).

    — Wealthy heirs. The estate tax threshold would get doubled to about $11 million for individuals and $22 million for married couples. Those whose inheritances would exceed those exemption levels would still get hit, since the plan wouldn't end the estate tax as the House wanted, but there aren’t too many of them.

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    — Businesses. The top corporate rate would move down to 21 percent from 35 percent, and shareholders and others with investment income would see their tax bills cut by one-third or more. Owners of businesses that are taxed at the same rates as individuals, from the corner grocery to the Trump Organization, would see their effective tax rate drop to less than 30 percent, at most, from as high as nearly 40 percent.

    — Big U.S. companies that operate globally, like Apple and Microsoft. The United States would follow most other industrialized countries in switching to a "territorial" tax system, where overseas profits aren't taxed at home. They'd also get a low, one-time tax rate when they bring home profits they're holding abroad. However, that tax would be larger than expected, and they would face complex rules meant to discourage them from moving more money and operations abroad.

    — Wall Street. Investment fund managers wouldn’t have to reclassify their "carried interest" compensation — the share of investor profits that they get — from lower-taxed capital gains to ordinary income. Despite President Donald Trump's vow to end what some consider a loophole, the only new limit fund managers would face is the amount of time they have to hold assets to qualify for the lower rate — three years instead of one year under current law.

    — People with high medical expenses and adopted children. Taxpayers would be able to deduct the costs of medical expenses that exceed 7.5 percent of their adjusted gross income for this tax year and next. In 2019, the threshold would return to 10 percent, its current level. House Republicans had proposed fully scrapping the deduction. A credit for adoptions also remains on the books, a provision that the House had also targeted for elimination.


    GOP wins Rubio’s and Corker’s votes on tax bill after last-minute changes

    By SEUNG MIN KIM and COLIN WILHELM

    — College students and K-12 teachers. College loan interest would remain deductible, and tuition waivers for graduate students wouldn’t get counted as taxable income. Both had been on the chopping block. But an excise tax on large college endowments is expected to remain in the tax package, which opponents are saying could hurt college scholarships going forward. For lower levels of education, teachers would still be able to deduct some of their out-of-pocket expenses for school supplies they buy their students.

    — Local governments, hospitals and housing. The legislation would preserve the tax-deductible status of private activity bonds. They are used by state and local governments for infrastructure, by hospitals that want to expand and for building affordable housing.

    — Manufacturers. Major manufacturers would benefit the most from a provision that would let businesses immediately write off the cost of new investments, known as full expensing. It would be on the books for five years before beginning to wind down under the bill, but backers expect it to get extended.

    — GOP brass: Trump, House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell are finally checking a legislative victory box as the bill speeds across the finish line with seemingly minimal resistance. They spent months trying to repeal the Affordable Care Act but couldn’t do it, and now they’re on the verge of eliminating a big part of it — the requirement for everyone to have health insurance — in the tax bill. Expect them to tell voters ahead of next year’s midterm elections that the tax cuts are growing the economy and everyone wins. But ...

    LOSERS:

    — People who make a lot of money and live in high-tax states like New York, New Jersey and California. No one would more acutely feel the loss of the federal deduction for all state and local taxes and the new $750,000 cap on the home mortgage interest deduction, down from $1 million. A compromise on SALT would allow taxpayers to deduct property taxes and either income or sales taxes, with a combined limit of $10,000. But some lawmakers, particularly from the Northeast, still say it's not enough for many of their constituents. Bottom line: The amount of their income that is taxable would increase.

    Homeowners, mostly on the East and West coasts, could see their home values decline. It would also affect infrastructure and public services such as education, according to Americans Against Double Taxation, since raising revenue needed to fund the costs of governance would be harder if residents can no longer write off all state and local taxes.

    — Doctors and lawyers. Some pass-through businesses, including doctors and lawyers, would be precluded from the lower tax rates on pass-through income.

    — Corporate borrowers. Business debt wouldn’t get the same tax benefits going forward because companies' ability to deduct interest would change. The House and Senate bills would place a new limit on the business deduction to 30 percent of income, though the two chambers defined income differently.


    By TOBY ECKERT

    — Workers who depend on a regular paycheck. Many of them would get a mostly minimal decrease in their marginal tax rate, compared to contractors and the self employed. This is due to the changes in taxation of pass-throughs, and some tax experts say people would try to game the system to take advantage of the pass-through deduction.

    — Deficit hawks. The tax plan was built with a $1.5 trillion budget allowance for tax cuts that didn’t require offsets, which advocates have said would mostly be made up by revenue from economic growth. But a host of official estimates and outside analyses have shown otherwise, and there’s certainly concern that the real cost of the package would exceed that $1.5 trillion when individual tax cuts that are only scheduled to run for eight years get extended as expected.

    — Preachers who want to politic from the pulpit. The long-standing ban on churches and other religious organizations endorsing political candidates would continue, despite an attempt by the House to use the tax bill to repeal it. Many evangelical Christian groups have been lobbying for years to get rid of the prohibition, and Trump had vowed earlier this year to "totally destroy" it. But the Senate parliamentarian ruled the repeal doesn’t meet the chamber’s rules, and so it was jettisoned.

    https://www.politico.com/story/2017/12/15/gop-tax-plan-winners-losers-230853?cmpid=sf
     
  2. ATJ-Lucko

    ATJ-Lucko MMAtheist

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    --- Post Added -- Dec 20, 2017, ---
     
  3. Walter Sobchak

    Walter Sobchak Crank some Frank!

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    How is Canada doing these days?
     
  4. ATJ-Lucko

    ATJ-Lucko MMAtheist

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    good

     
  5. Walter Sobchak

    Walter Sobchak Crank some Frank!

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    That’s fantastic
     
  6. ATJ-Lucko

    ATJ-Lucko MMAtheist

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    only good for the wealthiest companies to make even more money
     
  7. Walter Sobchak

    Walter Sobchak Crank some Frank!

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    Lucky them, wish I had came up with a business plan where I was in that upper echelon of that world. Still working blue collar, 17 more years I can retire with a pension thankfully.
     
  8. ATJ-Lucko

    ATJ-Lucko MMAtheist

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    173,470,018
  9. TriangleSmoke

    TriangleSmoke Motherfucker of the Century Site Donor

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    I'm getting a nice tax cut, but I'm really concerned about the deficit. What does this mean for my future children/grandchildren/social security/medicaid/etc? Are republicans going to want to cut SS/Medicaid to help with the deficit?

    I'm also VERY curious about what my company is going to do for the employees. We're a multi-billion dollar privately held company, and we have good people at the top. That said, I don't trust humans period. While my commission percentages should increase in light of the corporate tax rate reduction, I'm very doubtful that those percentages will see any increase...
     
    Kevo and Poindexter like this.

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