Republicans are all set to cut a lot of taxes.
Just not yours.
Today President Donald Trump enacted the most drastic changes to the American tax code in three decades.
Every Senate Republican present voted for it.
Only Sen. John McCain (R-Ariz.), receiving brain cancer treatment, was absent.
Here are some of the most notable highlights:
- Beginning January 1, the top individual tax rate will now be 37% instead of its previous 39.6.
- The corporate tax rate falls to 21% from its current 35%.
- There is a 20% deduction for the first $315,000 of qualified business income for “pass through” entities–businesses not registered as corporations–such as law firms and doctors’ offices, worth $600 billion.
- Income above $315,000 phases in limits, ultimately culminating in an effective marginal tax rate of 29.6%.
- The previous 20% corporate alternative minimum tax, designed to prevent the wealthy and corporations from avoiding taxes entirely, is repealed.
- Those who make more than $1 million will enjoy a tax of cut $5.8 billion a year.
- Cuts will trigger PAYGO, a 2010 law requiring cuts to Medicare and other programs to offset deficit increases. This includes federal student loans, foster care subsidies, and Meals on Wheels funding.
- $25 billion will be cut from Medicare by 2018, $400 billion over the next decade.
- Gone is the estate tax worth $150 billion.
- Over $200 billion in cuts will be put toward a provision allowing a greater deduction for dividends on foreign earnings.
- Important state and local income tax deductions on which working Americans rely are eliminated.
- The individual mandate required under the Affordable Care Act (Obamacare) is repealed, leaving around 24 million Americans without healthcare and jacking up healthcare premiums.
- The “carried interest” loophole for private equity fund managers and some hedge fund managers remains.
- Oil companies will now be permitted to drill in Alaska’s Arctic national wildlife refuge (ANWR).
The hardest hit will be builders, small business owners, residents of higher-taxed states like California and New York, the working poor, and charities.
Public sector employees will watch their incomes decline, but corporations will be still be able to benefit from the same deductions they always have.
The tax bill advanced past House Republicans Tuesday 227 to 203, with 12 voting against it.
No Democrats supported it.
It then went to the Senate, but had to return to the House after the bill violated necessary rules for Senate Republicans to pass it with a simple majority.
After the Senate removed the minor violations, House Republicans held another vote Wednesday, sending the bill to Trump’s desk for a signature.
Democrats were deliberately excluded from the closed-door sessions, but promised to use the predicted fallout from the new tax platform against Republicans in next year’s mid-term elections.
Senate Minority Leader Chuck Schumer (D-NY) had the following message for his Republican colleagues:
“Under this bill the working class, middle class, and upper middle class get skewered while the rich and wealthy corporations make out like bandits. It is just the opposite of what America needs, and Republicans will rue the day they pass this.”
The biggest winners from this historic economic milestone–Donald Trump, commerce secretary Wilbur Ross, Small Business Administration administrator Linda McMahon, education secretary Betsy DeVos, treasury secretary Steven Mnuchin, and secretary of state Rex Tillerson, according to the Center for American Progress (CAP).
Under current law, the first $11.2 million of an estate’s value is untaxed; any amount above that is taxed at 40%.
The new bill doubles the exemption to $22.4 million.
Now more than ever, we need to mobilize and make sure every Republican pays next year for making us pay for the next decade.
Image credit: motherjones.com