Your Guide to Following the U.S. Tax-Cut Debate

by Dramelin 10:30 PM 0 comments

Cutting individual and corporate taxes has been the top goal of congressional Republicans for years.
Now is their big chance.
They control the White House and Congress, and a new budget lets them pass a tax plan on their own, with no interference by Democrats.
Now comes the hard part: putting aside their differences to get to "yes.
" A tax cut may be the last, best chance for Republicans to carry a major legislative victory into congressional elections a year from now.
The House of Representatives started the process with a proposal to cut the corporate tax to 20 percent, reduce most individual tax brackets and cap the home-mortgage interest deduction.
It would increase the federal deficit by $1.
5 trillion in 10 years.
Where does the tax-cut effort stand right now? The action is in the House, where the Constitution requires "all bills for raising revenue" to originate.
The Ways and Means Committee started four days of meetings Monday to consider a tax-cut bill introduced Nov.
2 by Republican leaders.
Ways and Means Chairman Kevin Brady of Texas has said he’ll allow revisions in committee but not on the House floor.
What are the next steps? There’s a hoped-for schedule, and there’s reality.
Here’s a glimpse at both.
This week  Week of Nov.
13 Week of Nov.
20 By end of November December 3.
What are the biggest disputes? Though nobody expects the tax-cut plan to be revenue-neutral, there’s a need for at least some steps to offset its cost.
That means taking away tax breaks that some people and corporations now enjoy.
The House bill would end or limit taxpayers’ ability to deduct, when calculating their federal taxes, money they spend on home-mortgage interest, state and local taxes and medical expenses.
Some lawmakers want to retain those deductions.
There also are complaints that a proposed 25 percent tax rate for partnerships, limited liability companies and other "pass-through" businesses unfairly focuses on the highest earners, leaving out many small operators.
And some Republican senators including Bob Corker of Tennessee and John McCain of Arizona say they don’t want the tax legislation to add significantly to the budget deficit.
What are the obstacles in the House? Twenty House Republicans voted against the budget outline that set the stage for the tax debate.
More could join them in opposing the tax bill if it doesn’t address their concerns.
Possible dissenters include Republican representatives from high-tax states such as New York, New Jersey, Illinois and California, who object to ending the state and local tax deduction.
Does it get easier in the Senate? Quite the opposite.
Assuming Democrats remain united in opposition, the 52-48 Republican majority in the Senate allows no more than two dissenters, and at least four -- Corker, McCain, Susan Collins of Maine and James Lankford of Oklahoma -- have already expressed concerns.
Further, Senate budget rules allow only certain tax and spending legislation to advance on a simple-majority vote.
If parts of a bill are deemed "extraneous" to taxing and spending -- or if the bill would raise the deficit by more than the approved $1.
5 trillion over 10 years -- the bill would need an almost-impossible majority of 60 Senate votes to advance to Trump’s desk.
Is there any chance of Democratic support? Some.
There are a handful of Democrats who say their votes are in play, including Senator Joe Manchin of West Virginia.
Is there a deadline to get this done? Not really.
This term of Congress runs through 2018, so Republicans could debate tax cuts all through next year before having to start over.
The need for speed is almost entirely related to political momentum.
House Speaker Paul Ryan wants a new tax code in place by Jan.
1 so parts of it can be retroactive to 2017.
Republicans in Congress have no major legislative achievements, and some say they’ll be toast in the 2018 election if they don’t cut taxes.
So will this get done in 2017? That’s the $1.
Congress has lots of work to do, and not that many scheduled workdays left in the year.
On the website PredictIt, betters on Monday assigned an 83 percent probability that the House will pass its bill by the end of 2017, but only a 33 percent probability that the Senate will pass it.
The probability of a corporate tax cut by the end of 2017 was put at 31 percent.
Is this a tax cut or tax overhaul? Both.
The House bill is definitely a tax cut, and parts of the tax code would be overhauled, though not as broadly as Republicans envisioned.
The GOP pledged to make the tax code simple enough that most Americans could file on a piece of paper no bigger than a postcard.
By eliminating many deductions and doubling the standard deduction to $24,000 for joint filers, tax-writers are betting most families won’t need to itemize.
Would a tax cut make the economy grow faster? The Tax Foundation, an independent, right-leaning group in Washington, says over the long run, the House bill would boost U.
gross domestic product by 3.
9 percent, add 975,000 full-time equivalent jobs and increase wages by 3.
But the foundation also says the bill would cut federal revenue by $1.
98 trillion over 10 years before accounting for economic growth.
Even after counting economic growth, revenue would still be down by $989 billion.
The Reference Shelf.