- The Second
180 Days « Tax Cuts and Jobs Act
U.S. House Ways and Means Committee
November 2, 2017
Chairman Brady Introduces the Tax Cuts and Jobs Act
Legislation to Overhaul America’s Tax
Code for First Time in 31 Years Will Deliver More Jobs, Fairer Taxes,
WASHINGTON, D.C. – Today, House Ways and Means Committee Chairman
Kevin Brady (R-TX) introduced the Tax Cuts and Jobs Act – bold
legislation to overhaul America’s tax code for the first time in 31
years. With this bill, a typical middle-income family of four, earning
$59,000 (the median household income), will receive a $1,182 tax cut.
Upon introducing the Tax Cuts and Jobs Act – co-sponsored by Speaker Paul Ryan (R-WI) and all Ways and Means Committee Republican Members – Chairman Brady said:
“Today marks the beginning of the end of our nation’s broken tax code. The Tax Cuts and Jobs Act will deliver real tax relief to Americans across the country – especially low- and middle-income Americans who have been struggling for far too long to earn a raise and get ahead.
“Our legislation is focused entirely on growing our economy, bringing jobs back to our local communities, increasing paychecks for our workers, and making sure Americans are able to keep more of the money they earn.
“For families, we’re lowering rates, eliminating costly deductions that drive up taxes, and significantly increasing the standard deduction to protect more of each paycheck from taxes. We’re boosting family-focused tax benefits like the Child Tax Credit to help families keep up with the rising costs of child care, higher education, and looking after their loved ones. And we’re eliminating taxes that punish hardworking families like the Alternative Minimum Tax.
“Our legislation also delivers unprecedented simplicity that will make it easier and more affordable for families across our country to file their taxes each April. For the first time in history 9 out of 10 of Americans will be able to file their taxes on a form as simple as a postcard.
“And we’re making America competitive again so our workers can compete – and win – anywhere in the world, especially here at home. By delivering tax relief to businesses of all sizes, the Tax Cuts and Jobs Act makes it easier for entrepreneurs to achieve the American Dream – to start a business and create jobs in our local communities, and it entices employers to bring their headquarters and jobs back home.
“We made a promise to deliver tax reform that creates more jobs, fairer taxes, and bigger paychecks. After years of work, the Tax Cuts and Jobs Act is our answer.
“The legislation is now available online so our workers, families, and job creators can see how tax reform will improve their lives. I’m confident in the weeks ahead we will move this important legislation forward and work with the Senate to send a unified bill to President Trump’s desk by the end of the year.”
For individuals and families, the Tax Cuts and Jobs Act:
Lowers individual tax rates for low- and middle-income Americans to Zero, 12%, 25%, and 35% so people can keep more of the money they earn throughout their lives, and continues to maintain 39.6% for high-income Americans.
Significantly increases the standard deduction to protect roughly double the amount of what you earn each year from taxes – from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.
Eliminates special-interest deductions that increase rates and complicate Americans’ taxes – so an individual or family can file their taxes on a form as simple as a postcard.
Takes action to support more American families by:
Establishing a new Family Credit – which includes expanding the Child Tax Credit from $1,000 to $1,600 to help parents with the cost of raising children, and providing a credit of $300 for each parent and non-child dependent to help all families with their everyday expenses.
Preserving the Child and Dependent Care Tax Credit to help families care for their children and older dependents such as a disabled grandparent who may need additional support.
Preserves the Earned Income Tax Credit to provide important tax relief for low-income Americans working to build better lives for themselves.
Streamlines higher education benefits to help families save for and better afford college tuition and other education expenses.
Continues the deduction for charitable contributions so people can continue to donate to their local church, charity, or community organization.
Preserves the home mortgage interest deduction for existing mortgages and maintains the home mortgage interest deduction for newly purchased homes up to $500,000 – providing tax relief to current and aspiring homeowners.
Continues to allow people to write off the cost of state and local property taxes up to $10,000.
Retains popular retirement savings options such as 401(k)s and Individual Retirement Accounts so Americans can continue to save for their future.
Repeals the Alternative Minimum Tax so millions of individuals and families will no longer have to worry about calculating their taxes twice each year and pay the higher amount.
Provides immediate relief from the Death Tax by doubling the exemption and repealing the Death Tax after six years. Family-owned farms and businesses will no longer have to worry about double or triple taxation from Washington when they pass down their life’s work to the next generation.
For job creators of all sizes, the Tax Cuts and Jobs Act:
Lowers the corporate tax rate to 20% – down from 35%, which today is the highest in the industrialized world – the largest reduction in the U.S. corporate tax rate in our nation’s history.
Reduces the tax rate on the hard-earned business income of Main Street job creators to no more than 25%– the lowest tax rate on small business income since World War II.
Establishes strong safeguards to distinguish between individual wage income and “pass-through” business income so Main Street tax relief goes to the local job creators it was designed to help most.
Allows businesses to immediately write off the full cost of new equipment to improve operations and enhance the skills of their workers – unleashing the growth of jobs, productivity, and paychecks.
Protects the ability of small businesses to write off the interest on loans that help these Main Street entrepreneurs start or expand a business, hire workers, and increase paychecks.
Retains the low-income housing tax credit that encourages businesses to invest in affordable housing so families, individuals, and seniors can find a safe and comfortable place to call home.
Preserves the Research & Development Tax Credit – encouraging our businesses and workers to develop cutting-edge “Made in America” products and services.
Strengthens accountability rules for tax-exempt organizations to ensure the churches, charities, foundations, and other organizations receiving tax-exempt status are focused on helping people and communities in need.
Modernizes our international tax system so America’s global businesses will no longer be held back by an outdated “worldwide” tax system that results in double taxation for many of our nation’s job creators.
Makes it easier and far less costly for American businesses to bring home foreign earnings to invest in growing jobs and paychecks in our local communities.
Prevents American jobs, headquarters, and research from moving overseas by eliminating incentives that now reward companies for shifting jobs, profits, and manufacturing plants abroad.
The House Ways and Means Committee will mark up the Tax Cuts and Jobs Act on November 6, 2017.
The White House
Statement from the President on the Tax Cuts and Jobs ActI applaud the House Ways and Means Committee for introducing the Tax Cuts and Jobs Act, which is another important step toward providing massive tax relief for the American people. My tax reform priorities have been the same since day one: bringing tax cuts for hardworking, middle-income Americans; eliminating unfair loopholes and deductions; and slashing business taxes so employers can create jobs, raise wages, and dominate their competition around the world. The policies of my Administration have already helped to drive the stock market to all-time highs and the unemployment rate to a 16-year low. Economic confidence is skyrocketing and our GDP grew 3 percent yet again this quarter.
We are just getting started, and there is much work left to do. The special interests will distort the facts, the lobbyists will try to save their special deals, and some in the media will unfairly report on our efforts. But my Administration will work tirelessly to make good on our promise to the working people who built our Nation and deliver historic tax cuts and reforms -- the rocket fuel our economy needs to soar higher than ever before.
Committee for a Responsible Federal Budget
A Step Backwards for Fiscal ResponsibilityToday, the House Ways and Means Committee unveiled the Chairman’s Mark of the “Tax Cuts and Jobs Act.” The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
While it is encouraging to see the House move forward on tax reform, it seems each new vote and milestone is a step backwards for the cause of fiscal responsibility.
The original House-passed budget proposed reconciliation instructions for revenue-neutral tax reform along with $200 billion of spending cuts. The final budget passed allowed instead for a $1.5 trillion deficit increase. And now we have a tax plan that may be even worse.
Not only would today’s legislation cost more than $1.5 trillion over a decade, but it includes a number of gimmicks, including allowing certain provisions to expire, that could ultimately result in more than $1.5 trillion of new deficits. The bill also continues to rely on unrealistic economic growth assumptions to justify its cost.
Even a $1.5 trillion increase in the debt amounts to almost $12,000 per household – a steep price passed on to our children.
Tax reform is an important national priority that can help grow the economy if done right. We are pleased to see the House put forward a number of serious pay-fors to help finance rate reductions. But given the huge unpaid-for gap remaining, this plan does not constitute true comprehensive, revenue-neutral, and pro-growth reform. It instead is a bill of treats paid for by too many tricks that could harm the economy, not help it – a scary prospect for our country’s future at a time when we already face a dire fiscal state.
With debt higher than any time since just after World War II and trillion-dollar annual deficits slated to return by 2022 under current law, there is no justification to adding trillions more to the nation’s credit card. No credible model shows that tax cuts will create enough growth to fill in the funding gap, and increasing the debt can actually slow economic growth, leaving us in worse shape than before.
We encourage members of Congress to focus on further base broadening, new sources of revenue, spending cuts, or scaled-back rate reduction to pay for this bill. The best and only real chance for tax reform to grow the economy is if it is permanent and fully paid for.
Concord Coalition Says Tax Plan Is Fiscally IrresponsibleWASHINGTON -- The Concord Coalition warned that the tax plan released today by the House Ways and Means Committee is fiscally irresponsible and would create even higher federal deficits than are already projected for the coming decade.
“True tax reform should aim to grow the economy without growing the debt ” said Robert L. Bixby, Concord’s executive director. “This plan would move U.S. fiscal policy in a dangerous direction, openly inviting higher deficits in the face of unsustainable debt.”
“While some special provisions in the tax code are eliminated or reduced to increase federal revenue, the proposed tax cuts are so deep that they would cancel out that revenue gain and require additional borrowing,” Bixby said.
The federal debt recently passed the $20 trillion mark, and the Congressional Budget Office (CBO) projects that under current law the government is on track to add more than $10 trillion to that in the next 10 years. This version of the tax plan will add at least another $1.5 trillion onto that projection.
Furthermore, as the details of the plan are analyzed it is likely that some of the politically sensitive choices being made to limit the impact on the deficit will be revisited.
“It is important that any changes made to this draft to accommodate interest group concerns and increase potential support be paid for by reducing tax cuts rather than increasing the number of budget gimmicks,” Bixby said.
The proposed legislation is already using some well-worn timing gimmicks, such as gradually phasing the cuts in to make their 10-year costs appear smaller or prematurely sunsetting them. If the cuts with sunset provisions are later renewed, the plan will likely add even more to the deficit than the current $1.5 trillion price tag.
The proposal also does very little to simplify the tax code in a way that would increase economic efficiency and support long-term economic growth. In fact some provisions, like the new business pass-through rate, would substantially increase the complexity of the code.
Congressional leaders and President Trump are pushing for quick approval of tax legislation. But undue haste would be unfortunate, particularly with such a massive and complex overhaul of the tax system that has been worked out behind closed doors -- and without the benefit of serious bipartisan discussion.
At a minimum, lawmakers should make sure they understand what they are voting on and give the CBO time to provide careful estimates of the fiscal and economic impacts that proposed measures would have.
Using some revenue-raisers to pass legislation that increases deficits overall would represent a lost opportunity for real tax reform that would boost economic growth and start reining in the federal debt.
A copy of this press release can be found here.
The Concord Coalition is a nonpartisan, grassroots organization dedicated to fiscal responsibility. Since 1992, Concord has worked to educate the public about the causes and consequences of the federal deficit and debt, and to develop realistic solutions for sustainable budgets. For more fiscal news and analysis, visit concordcoalition.org and follow us on Twitter: @ConcordC
Democratic National Committee
5 Worst Parts Of The Newly-Revealed Republican Tax Plan
Today House Republicans released a tax bill that provides massive tax
cuts for the wealthy and big corporations while simultaneously cutting
the health care, education, and mortgage deductions middle-class
families rely on and blowing a big hole in the deficit. Here are just
some of the worst parts of the newly-revealed Republican tax plan:
Provides a windfall to huge corporations by cutting the corporate tax rate from 35% to 20%.
Bloomberg: “House Republican leaders began rolling out a tax bill Thursday that contains sweeping changes for business and individual tax rates, including a measure to cut the corporate tax rate to 20 percent.”
Gives a massive handout to the wealthy by repealing the estate tax and eliminating the alternative minimum tax.
Washington Post: “It would create giant new benefits for the wealthy by cutting business taxes, eliminating the estate tax, and ending the alternative minimum tax.”
New York Times: “The proposal will double the estate tax exemption to roughly $11 million, from $5.49 million, meaning families can avoid paying taxes on large inheritance. And it eventually repeals the estate tax altogether, phasing it out entirely in six years.”
Repeals deductions that benefit middle-class families.
Wall Street Journal: “For example, the proposal repeals an itemized deduction for medical expenses, a crucial provision to households with extraordinary health-care costs. It also repeals the tax credit for adoption and the deduction for student-loan interest. The bill also limits the home mortgage-interest deduction.”
Creates a Trump loophole by lowering rates on pass-through businesses from 39.6% to 25%.
Vox: “It would also offer a new low tax rate for owners of ‘pass-through’ businesses like LLCs and partnerships, whose income from their businesses is taxed as personal income. The bill in its current form would almost certainly give disproportionate benefits to wealthy Americans, who tend to benefit from corporate tax cuts more than non-wealthy Americans and who could likely exploit the pass-through rate by setting up dummy corporations.
Eliminates the $4,050 per child tax exemption and calls for a $300 tax credit that’s only temporary.
Associated Press: “The child tax credit would be increased from $1,000 to $1,600, though the $4,050 per child exemption would be repealed.”
Wall Street Journal: “The House bill also creates a new $300 credit for each person in a filer’s family who isn’t a child, including the primary taxpayer and non-child dependents such as college students. Those $300 credits expire after 2022.”
National Association of Manufacturers
NAM: Tax Plan Is A Grand Slam For Manufacturers And U.S. Economy
Momentum Is On The
Side Of America’s Workers
U.S. Chamber of Commerce
U.S. Chamber Applauds House Tax Reform Draft, Acknowledges More Work Remains to be Done
Financial Accountability and Corporate Transparency (FACT) Coalition
November 2, 2017
House Bill a Gift to Offshore Tax Dodgers and OutsourcersWASHINGTON, D.C. — The U.S. House Ways and Means Committee unveiled legislation Thursday that would overhaul the U.S. tax system. According to the Financial Accountability and Corporate Transparency (FACT) Coalition, the bill would reward corporations that have shifted profits to tax havens. The proposal would also create new measures to tax future profits booked offshore at either zero or ten percent, depending upon how the income is classified. These low rates for offshore income contrast with a higher rate – 20 percent for domestic businesses. The Coalition is still reviewing the plan to evaluate the full impact of the international tax provisions.
Clark Gascoigne, the deputy director of the FACT Coalition, issued the following statement:
“This bill appears to be a gift to the multinational companies that have dodged taxes for years by offshoring profits and jobs. It rewards those corporations that have booked trillions of dollars overseas with a special 12 percent tax rate on their past offshore profits. Worse, the bill grants an even lower rate — a mere 5 percent rate — for the companies that have outsourced real investments abroad. There is no economic justification for a lower rate on profits already made.
“The most dangerous parts of the plan are how they treat offshore profits moving forward. The proposal permanently gives multinational corporations a tax rate that is, at most, half the rate for small and domestic businesses. Many multinationals will be able to pay zero percent on their profits booked offshore.
“The lower offshore rate will only incentivize large corporations to book more and more profits offshore and outsource production and jobs to tax haven countries like Switzerland and Ireland. These tax giveaways hurt small businesses and middle-class taxpayers who will pay in some combination of higher taxes, larger deficits, and cuts to services they use.
“While we appreciate some of the base erosion measures in the bill, they won’t fix the problem. In closing one offshore loophole, the bill has opened up another, offsetting any potential benefits to stop the gaming of the tax code. This legislation is simply out of step with the American people, who overwhelmingly believe that multinational corporations should pay the same rate, if not more, on the profits they book overseas as they do on their profits earned at home.”
Republican Tax Bill Nothing But Corporate Giveaways
This tax bill is a job killer. It gives hundreds of billions of dollars in tax breaks to companies that outsource jobs and profits. No matter how it’s spun by Republican politicians, their tax bill is nothing but giveaways to Wall Street, big corporations and millionaires, paid for on the backs of working families.
It is astounding that a tax bill that will encourage offshoring is even under consideration. It’s shameless to propose cutting Medicaid, Medicare, education and infrastructure to pay for tax breaks for the 1%. History tells us, commonsense tells us and careful analysis of this tax bill tells us that these tax giveaways for the wealthy and big corporations will never trickle down to the rest of us. Real tax reform actually can put money back in the pockets of working people, but this is not that kind of plan.
For the latest, follow @RichardTrumka and @AFLCIO on Twitter and check out our blog.
Contact: Carolyn Bobb
National Federation of Independent Business
NFIB Unable to Support Tax Bill in Current Form
National Federation of Independent Business (NFIB) says tax bill leaves too many small businesses out
Washington, D.C. (November 2, 2017) – The National Federation of Independent Business (NFIB) today issued the following statement on behalf of President and CEO Juanita Duggan in response to the tax plan released by congressional leaders:
“The National Federation of Independent Business is unable to support the House tax reform plan in its current form. We will work with Chairman Brady to make the necessary corrections so that the benefits of tax reform extend to all small businesses.
“This bill leaves too many small businesses behind. We are concerned that the pass-through provision does not help most small businesses. Small business is the engine of the economy. We believe that tax reform should provide substantial relief to all small businesses, so they can reinvest their money, grow, and create jobs.”
For more information about NFIB, please visit www.nfib.com.
Republican Tax Reform Plan Slams Middle Class
Granger MacDonald, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Kerrville, Texas, today issued the following statement on the tax plan unveiled by House Republicans:
“The House Republican tax reform plan abandons middle-class taxpayers in favor of high-income Americans and wealthy corporations. The bill eviscerates existing housing tax benefits by drastically reducing the number of home owners who can take advantage of mortgage interest and property tax incentives.
“And capping mortgage interest at $500,000 for new home purchases means that home buyers in expensive markets will effectively lose this housing tax benefit moving forward.
“The House leadership killed a cost-effective plan proposed by NAHB that Ways and Means Committee leaders agreed to include in the legislation. It would provide a robust homeownership tax credit that would have helped up to 37 million additional home owners who do not currently itemize. Most of them are low- and moderate-income home owners.
“Meanwhile, as corporations receive a major tax cut, small businesses, which generate the lion’s share of job growth, get limited relief.
“The bottom line: Congress is ignoring the needs of America’s working-class families and small businesses.
“And by undermining the nation’s longstanding support for homeownership and threatening to lower the value of the largest asset held by most American families, this tax reform plan will put millions of home owners at risk.”
AAU Statement on the House Tax Reform BillFollowing is a statement by Association of American Universities President Mary Sue Coleman on the House tax reform bill.
Eliminating employer-provided educational assistance, the student loan interest deduction, and other critical higher education tax provisions is counterproductive as it undermines the very workforce Congress seeks to support. Pro-growth tax reform should expand these student benefits to foster a more highly-educated and skilled workforce.
Additionally, imposing an excise tax on nonprofit private university endowments is a short-sighted move that will only harm students and their families. Endowments support substantial student aid and student service programs, and provide funding for instruction, research, and for building and maintaining classrooms, labs, libraries, and other facilities. These funds help universities better support their students and respond to changing needs in their local communities, states, and the American economy.
At a time when our country faces increasing global competition, our tax code must support our students, scientists, engineers, researchers, and entrepreneurs who create the cures and technologies that drive our economy and support our national health and security. We need a tax code that bolsters the government-university partnership, supports affordable and accessible higher education, and permits universities to conduct the groundbreaking research on which the American taxpayer depends.
Founded in 1900, the Association of American Universities comprises 62 distinguished institutions that continually advance society through education, research, and discovery.
Our universities earn the majority of competitively awarded federal funding for academic research, are improving human life and wellbeing through research, and are educating tomorrow’s visionary leaders and global citizens.
AAU members collectively help shape policy for higher education, science, and innovation; promote best practices in undergraduate and graduate education; and strengthen the contributions of research universities to society.