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The Biggest Winners And Losers In GOP Tax Reform Bill
The Republican plan to revise the nation’s tax code was made public on Thursday.
Called the “Tax Cuts & Jobs Act,” it’s the biggest overhaul of the federal tax system since 1986.
The complex nature of the code and the bill will require time to fully analyze. And with both GOP and Democratic objections to its elements, it is very likely to change before a final form goes to Congressional vote. But the Washington Post followed the revision’s introduction with an article that identifies some of who look to win and lose in the first draft.
Among those who stand to benefit:
• Large Corporations: The corporate tax rate will drop from 35 percent to 20 percent, along with other tax breaks.
• The Mega-Rich: The bill eliminates the estate tax by 2024, and until then doubles the current minimum amount of $5.49 million to qualify for paying the so-called “death tax.” They will still be able to use charitable deductions to lower their tax bills.
The bill also eliminates the alternative minimum tax that served as a hedge against those who make over $130,000 a year from using deductions to pay little or no federal taxes. As the Post notes, “There is perhaps no better example of how much this will benefit the rich than that fact that Donald Trump would have paid $31 million less in taxes in 2005 (the one year for which we have his tax returns) without the AMT.”
Among those who likely won’t benefit and it might negatively affect:
• Some Home Buyers & Builders: The amount that home-buyers can deduct for mortgage interest payments drops from the first $1 million to $500,000. Deductions for state and local property taxes will be capped at $10,000. This will affect those higher-income Americans who buy and own expensive homes. Expert also believe it will depress the market for high-priced home builders.
• Residents of High Tax States: Deductions for state and local taxes will no longer be able to deduct them from their federal taxes. Is it any surprise that more than a third of those deductions are from such blue-leaning states as California, New York, New Jersey and Connecticut?
• Lower Income Americans: The bill gives tax cuts to the wealthiest Americans and corporations, but the lower 35 percent get no tax relief or benefits at all.
It also has potential negative effects on charities by raising minimum charitable deduction amounts for individuals and couples, making them less likely to file itemized returns and make charitable donations. Some small businesses also won’t enjoy any tax relief. And the “trickle down” theory that claims lower taxes on large businesses and the rich help stimulate job growth has been largely debunked, making the “Jobs” part of the bill’s title highly doubtful.