Polk County Publishing Company, P.O. Box 1267, Livingston, TX. 77351 - (936) 327-4357











San Jacinto News Times - Local News

Copyright 2017 - Polk County Publishing Company

 

Tax reform bill passes re-vote

 

By Alton Porter
Contributing Reporter

After being forced to vote a second time on the $1.5 trillion Tax Reform Bill, sponsored by Texas Congressman Kevin Brady, the majority in the U.S. House of Representatives stayed on task and again passed the sweeping tax overhaul legislation Wednesday, Dec. 20. The House approved the tax bill 224 to 201 in that final vote on the bill. The day before, House lawmakers had passed the measure 227 to 203. And early Wednesday morning, the U.S. Senate gave its approval to the bill on a 51 to 48 vote. Due to last minute revisions made to the bill in the Senate, the House was forced to re-vote on the final version. And House members swiftly did so later Wednesday. The second House vote was fundamentally a formality since the Senate changes were made to comply with that body's budget rules and did not materially change the overall bill. The House and Senate actions cleared the way for President Donald Trump to sign the legislation into law on Friday, Dec. 22. Twelve House Republicans voted against the legislation both Monday and Tuesday, and no Democrat voted for the bill. It amends the Code, reducing tax rates and modifying policies, credits and deductions for individual taxpayers and businesses. Among the changes for individual taxpayers, it replaces the seven old tax brackets (10, 15, 25, 28, 33, 35 and 39.6 percent) with seven new ones (10, 12, 22, 24, 32, 35 and 37 percent), nearly doubles the standard deduction and eliminates the deduction for personal exemptions. In addition, it expands and doubles the child tax credit, repeals the overall limitation on certain itemized deductions and caps the state and local tax deduction for itemizers at $10,000. It creates a temporary credit for non-child dependents and lowers the cap on the mortgage interest deduction to mortgages up to $750,000 (previously $1 million). The legislation also curbs who's hit by the alternative minimum tax and exempts almost everybody from estate taxation. The tax cuts for individuals are set to expire in 2025, so that the bill complies with budget rules, unless a future Congress acts to prevent them from expiring. The bill eliminates the requirement, known as the individual healthcare mandate, in the Affordable Care Act (Obamacare) that requires most people to have health insurance or pay a penalty. A few of the changes for businesses include reducing the corporate tax rate from a maximum of 35 percent to a flat 21 percent rate, allowing increased expensing of the costs of certain property and limiting the deductibility of net interest expenses to 30 percent of a business' adjusted taxable income. The legislation also provides a tax break to owners of pass-through businesses, whose profits are taxed through the Code for individuals. In a conference call after the House voted to pass the bill the first time Tuesday, Brady (R-Texas, 8th Dist.) gave a brief statement and answered questions of Texas newspaper editors and reporters. Here are some of the questions and the congressman's answers: Question: You've promised that taxpayers will be able to file their tax returns on a postcard under the new law, but Rep. Richard Neal (D-Mass) says that's not so because the law has gotten so complicated. Will average taxpayers still be able to do their filings on a postcard? Answer: Yes, because of doubling the standard deduction, nearly nine out of 10 Americans will be able to file using a simple postcardstyle system. We took a bold approach. We really stripped the Tax Code down to its basics and started listening to the American people about what is important to them in a 21st Century Tax Code. Question: How do you respond to some people's belief that this legislation will benefit the wealthy and hurt the middle class? Answer: I think that's baloney. I think Democrats had already written those talking points two years ago. And just by sticking and being obsessed with that, I think they've ignored how much tax relief there is for real hardworking Americans. The median family of four in this country—two parents, two kids—making $73,000 a year will see a tax cut of $2,059. Question: In much of East Texas the median family income is considerably smaller than $73,000. It's closer to $45,000. Do you have any idea what relief will be for families who have that size income? Answer: Yes, I do. I will have to dig them up. I do know that a single mom with one child making around $40,000 a year sees a tax cut, I believe, of almost 58 percent in her tax liability. Question: How about folks who are nearing retirement who don't have minor children at home? Answer: The legislation is really important for them because we're doubling the standard deduction so their first $12,000 is protected from taxation. We double that for married couples. So, that family starts out with $24,000 of their earnings protected from taxation. Then, they see much lower tax rates for each dollar above that. They also keep the medical expense deduction. We retain the tax credit for the elderly, blind and disabled. So, for those retirees and near-retirees, this tax reform plan is especially good. Question: Tax cuts usually necessitate cuts to certain programs and services to make up the difference. What are some programs and services that will be cut as a result of this legislation? Answer: None. In fact, there are no cuts to spending programs to fund this tax reform. That's one of the fake news items you hear from opponents of tax reform. If we don't do tax reform, if we don't succeed, and our economy just continues to just slump along for another decade the way every economist predicts it will without tax reform. I think our debt will grow as a country. I think it will be tougher to see revenues for important programs, like the military and our veterans. Social Security and Medicare are two of our most important programs. They must be saved. And the funding for those programs come from payroll taxes. This tax reform plan strengthens Social Security and Medicare by getting people back to work and growing their paychecks. Question: Congressman, you said there will be no spending cuts attached to this. Most economists are very skeptical of the idea that this is going to make up for the $1.5 trillion shortfall. How confident are you that this is not going to prompt massive deficits, and then, spending cuts? Answer: I am confident it will grow the economy in a major way. Look at the estimates. They vary. Some are more conservative estimates than others, but almost all recognize this tax reform will grow the economy in a significant way, that more federal revenues will come in. It's just an argument over how much more will come in than is coming in today.

 

Polk County Publishing Company