Thursday, November 16, 2017

Tax Reform Moves Forward

Very good news today as the House just passed its tax reform bill--with no Democrat support. Thirteen R's voted against it, primarily from states with high state income taxes which would (under the House plan) be treated far differently under the plan. NYT has a good summary here, with the key graph below:

"The House tax bill, which passed in the Ways and Means Committee last week, would cut taxes more than $1.4 trillion over 10 years. It cuts the corporate tax rate to 20 percent from 35 percent, collapses the number of tax brackets to four from seven, switches the United States to an international tax system that is more in line with the rest of the world, and eliminates or scales back many popular deductions, including one for state and local taxes paid."

I honestly don't know how I will make out under this new approach--I pay a goodly bit of State and Local income taxes that I won't be able to deduct anymore, but I also run a sole proprietorship which may mean I get taxed at the Corporate rate--something I'll have to check.

What is really important here--for the future of the GOP in ANY form--is that they get this done, and by "this", I mean tax reform/cuts. The Senate has a somewhat different bill they are working on, and with their tiny margins, each Republican Senator's ability to fudge the deal rises dramatically (as we saw with health insurance). I have no idea how this will all turn out, but I think the neither the House bill nor the Senate's will be passed in its current form. I give SOME reform a 50/50 shot. But if it fails, the likely 2018 GOP Bloodbath becomes a lock.

Let's face it; if the GOP can't pass tax reform owning both chambers and the White House, then the reform they are trying to achieve is simply not possible. It isn't a sign of incompetence, but it will be taken as one. I'd love to see them work their assess off to do a solid bill that could bring a few D's along--but which would CERTAINLY lock up their own caucus. But it seems they are under the gun in terms of timing, because of how ineffective they and the President have been in getting anything done in this Congress.

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