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U.S. Republicans forge tax deal, final votes seen next week

By David Morgan and Amanda Becker

 

Senate Majority Leader Mitch McConnell (R-KY) arrives to talk to the media following the Republicans weekly policy luncheon on Capitol Hill in Washington, U.S., December 12, 2017. REUTERS/Yuri Gripas

 

WASHINGTON (Reuters) - Congressional Republicans reached a deal on final tax legislation on Wednesday, clearing the way for final votes next week on a package that would slash the U.S. corporate tax rate to 21 percent and cut taxes for wealthy Americans.

 

Under an agreement between the House of Representatives and the Senate, the corporate tax would be 1 percentage point higher than the 20 percent rate earlier proposed, but still far below the current headline rate of 35 percent, a deep tax reduction that corporations have sought for years.

 

As they finalised the biggest tax overhaul in 30 years, Republicans wavered for weeks on whether to slash the top income tax rate for the wealthy. In the end, they agreed to cut it to 37 percent from the current 39.6 percent.

 

That was despite criticism from Democrats that the Republican plan tilts toward the rich and corporations, offering little to the middle class.

 

"I think we've got a pretty good deal," Senate Finance Committee Chairman Orrin Hatch told reporters.

 

The emerging agreement would repeal the corporate alternative minimum tax, set up to ensure profitable companies pay some federal tax, and expand a proposed $10,000 cap for state and local property tax deductions to include income tax, lawmakers and sources familiar with the negotiations said.

 

It was also expected to limit the popular mortgage interest deduction to home loans of no more than $750,000 and provide the owners of pass-through businesses, such as sole proprietorships and partnerships, with a 20 percent business income deduction.

 

The deal would gut part of the Obamacare health law by repealing a federal fine on individuals who fail to obtain health insurance, while authorizing oil drilling in Alaska's Arctic National Wildlife Refuge. Both add-on measures were part of nailing down sufficient votes for passage.

 

Moving the corporate tax target rate to 21 percent from 20 percent gave tax writers enough revenue to make the tax cuts immediate, Republican Senator Ron Johnson told reporters.

 

News of the deal began circulating just before a formal House-Senate conference committee began debating it in public, leading Democrats to decry the gathering as a sham.

 

A final bill could be formally unveiled on Friday, with decisive votes expected next week in both chambers.

 

UNDECIDEDS

 

Despite expressions of confidence about passage from party leaders, the path to a final vote in the Senate could still be perilous. Republicans, who hold a 52-48 majority in the 100-seat Senate, can lose no more than two votes on the tax bill.

 

Republican Senator John McCain, who has brain cancer, was in a military hospital to undergo treatment for the side effects of cancer therapy.

 

At least three other Senate Republicans still seemed to be undecided, including Arizona's Jeff Flake, who was not specific about his hesitation in brief hallway remarks to reporters.

 

Bob Corker, a fiscal hawk, said he was undecided on whether to support the bill. He told reporters: "My deficit concerns have not been alleviated."

 

Susan Collins, who helped sink her fellow Republicans' efforts to dismantle former Democratic President Barack Obama's healthcare law earlier this year, said she would not make a final decision on which way to vote "until I see the bill."

 

In a White House speech, Trump said the Internal Revenue Service had advised that if he signs the bill into law before Christmas, the tax cuts would take effect in February.

 

The IRS had no immediate comment. But a Trump administration official said the IRS would have to readjust its paycheck tax withholding tables for employers and that new withholding levels would take effect in February.

 

Under the bill, tax returns being filed next year for 2017 would not be affected, but returns filed in 2019 for 2018 would.

 

Trump appeared in the White House with several middle-class families he said would benefit from the tax bill.

 

The Joint Committee on Taxation and the Congressional Budget Office, both nonpartisan research units of Congress, have forecast that wealthy taxpayers and businesses would gain disproportionately from the debt-financed Republican proposals.

 

DEBT EXPANDS

 

As drafted, the Republican plan was expected to add as much as $1.5 trillion to the $20 trillion national debt in 10 years. With that in view, Republicans have been urgently trying to finalise details of their package without increasing its estimated impact on the federal deficit and the debt.

 

At a tax event held by Democrats, Moody's Analytics Chief Economist Mark Zandi said the Republican bill, if enacted, would cause interest rates to rise, meaning the benefits of a lower corporate tax rate would be “completely washed out.”

 

Stock markets have rallied for months in anticipation of lower taxes for businesses. The benchmark Dow Jones Industrial Average Index closed up 0.33 percent at 24,585.43.

 

With their defeat on Tuesday in an Alabama special U.S. Senate election, Republicans were under pressure to complete their tax overhaul before Christmas and before a new Democratic senator can be formally seated in the Senate.

 

Democrat Doug Jones' victory in Alabama came hours ahead of the final tax deal. When Jones arrives in Washington, the Republicans' already slim Senate majority will narrow to 51-49. Fast action by Republicans on taxes would prevent Jones from upsetting expected vote tallies since he will not likely be seated until late December or early January.

 

Senate Democratic leader Chuck Schumer called on Republicans to delay a vote on overhauling the tax code for the first time in 30 years until Jones can be seated. But that was unlikely.

 

"Who would've thought they could have made the bill even less favourable to the middle class and more slanted towards the wealthy?" Schumer told a news conference.

 

(Additional reporting by Jeff Mason, Steve Holland, Susan Cornwell, Richard Cowan, Makini Brice and Doina Chiacu; Editing by James Dalgleish and Peter Cooney)

 

-- © Copyright Reuters 2017-12-14

[Pib]

 

Quote

The Joint Committee on Taxation and the Congressional Budget Office, both nonpartisan research units of Congress, have forecast that wealthy taxpayers and businesses would gain disproportionately from the debt-financed Republican proposals.

 

Above pretty much sums it up.  

[mrfill]

Its a very simple plan really. The government just borrow heaps and heaps of money - way more than it can afford - and give it away to the deserving super rich. When it comes to repayment of the loan - just take out another huge loan and explain to the peasants that they can't have any as money is very tight, but they have to contribute to the repayments anyway.

[ilostmypassword]

1 minute ago, mrfill said:

Its a very simple plan really. The government just borrow heaps and heaps of money - way more than it can afford - and give it away to the deserving super rich. When it comes to repayment of the loan - just take out another huge loan and explain to the peasants that they can't have any as money is very tight, but they have to contribute to the repayments anyway.

The Republicans are already actually saying that they are looking to cut entitlements programs next because there isn't enough revenue to pay for them!

[Pib]

1 hour ago, ilostmypassword said:

The Republicans are already actually saying that they are looking to cut entitlements programs next because there isn't enough revenue to pay for them!

No, not "cut"...wrong political word in this case.  "Reform" entitlement programs say the Republicans.  Gotta use the right razzle-dazzle political talk.  

[Jingthing]

It's an incredibly UNPOPULAR bill with the American public because the vast majority smell the truth, the trump has turned out to be no populist and this bill is actually a DREAM for the take from the poor to give to the rich set. 

So they're rushing this mess through before Jones is seated. 

In fairness, EXPATS that stay EXPATS will be getting something from this. No need to worry about qualifying for the expat ACA exclusion anymore as this bill will be killing the mandates. Not sure which tax year that will be effective. 

[riclag]

9 hours ago, Pib said:

 

 

Above pretty much sums it up.  

I think you have to admit their are two sides to this debate.

Trump administration officials have argued, variously, that GDP growth would eliminate some to all of the deficits produced by the tax plan.

 

 

The CBO and JCT score is highly speculative given how they arrive in their estimation by using dynamic/static scoring models.

http://www.ncpa.org/sub/dpd/index.php?Article_ID=25134

 

According to the article below their are differences of analytical sources. 

http://www.nationalreview.com/article/454327/gop-tax-reform-favors-middle-class-not-rich

 

 Nobody talks about the most important thing to take away from this is that trillions of dollars in 401k's could be in jeopardy or lost if the stock market crashed just because the  Middle Class tax cut wasn't passed.

 

 

 

 

Edited December 14, 2017 by riclag

[Pib]

Just now, riclag said:

 I think the most important thing to take away from this is that trillions of dollars in 401k's could be in jeopardy or lost if the stock market crashed just because the  Middle Class tax cut wasn't passed.

 

Give us a break!!  The sky will fall---NOT!!!!   The stock market ain't going to crash if this tax cut which goes mostly to big business and billionaires/millionaires does not pass.   But it is going to pass purely along a party line vote....and it will probably bite the GOP in the butt come the 2018 elections.

[riclag]

2 minutes ago, Pib said:

Give us a break!!  The sky will fall---NOT!!!!   The stock market ain't going to crash if this tax cut which goes mostly to big business and billionaires/millionaires does not pass.   But it is going to pass purely along a party line vote....and it will probably bite the GOP in the butt come the 2018 elections.

Abc reporter caused the market to loose 300 just on his inaccurate news.

[Pib]

5 minutes ago, riclag said:

Abc reporter caused the market to loose 300 just on his inaccurate news.

 

That news report didn't talk the tax plan possibly not passing; it had to do with the possibility of Flynn testifying he was directed by Donald to talk to the Russians.  The stock market does wide swings frequently and on that day it briefly dipped over 300 points but come close of business  it was down a mere 40 points to 24,231.....less than 0.20%.     The sky will not fall...believe me.

 

Quote

 

Stocks finished lower on Friday after a report that Michael Flynn was directed by President Trump to talk to Russians sent investors on a wild ride.

 

ABC News reported that Flynn, the former national security adviser, would testify that he was directed to make contact with Russians during the presidential campaign in 2016. Flynn pleaded guilty to lying to the FBI about his post election contacts with Russia's ambassador to the U.S.

 

ABC said later in an updated report that Flynn will say Trump asked him to make contact with Russia "initially as a way to work together to fight ISIS in Syria."

 

The major averages hit their session lows on the report, with the Dow Jones industrial average briefly dropping 350.45 points before closing 40.76 points lower at 24,231.59.

 

 

 

 

[boomerangutang]

 while authorizing oil drilling in Alaska's Arctic National Wildlife Refuge. Both add-on measures were part of nailing down sufficient votes for passage.

I'm against that. 

Moving the corporate tax target rate to 21 percent from 20 percent gave tax writers.....

 

Corporations getting tax breaks is easy.  Most corps pay half or less than what they're required to pay.  There are many US corps which don't pay any tax at all.  They pay less than the guy stacking buns at the greasy hot dog place.  .....less than the single mom with 5 kids, who is  mopping floors at a Trump hotel basement.

 

Trumpsters are projecting larger growth than any other entity, including the CBO, ...and thereby using those inflated numbers (along with ridiculous terms like 'trickle-down') to explain how their plan won't be a disaster.  ....while avoiding mention of the $1.5 to $2 trillion projected shortfall in coming years.   Why should Trump and his family worry?  they'll probably be comfy in Russian dachas by then.

 

 

[riclag]

6 minutes ago, Pib said:

That news report didn't talk the tax plan possibly not passing; it had to do with the possibility of Flynn testifying he was directed by Donald to talk to the Russians.  The stock market does wide swings frequently and on that day it briefly dipped over 300 points but come close of business  it was down a mere 40 points to 24,231.....less than 0.20%.     The sky will not fall...believe me.

Yes I guess I didn't communicate well enough sorry.The news of the ABC report was just a blip and was corrected several hours later,enough time for the market to correct itself.The point is it reacts to current events. 

The tax cut bill  was or is what's driving the investments in the stock market.

I follow the market enough to know one can't time a correction. I don't have the time to wait for it to come back if it does.

I honestly think a major (20%)correction would be the result of the bill not being passed .

[ilostmypassword]

On 12/14/2017 at 8:27 PM, riclag said:

Yes I guess I didn't communicate well enough sorry.The news of the ABC report was just a blip and was corrected several hours later,enough time for the market to correct itself.The point is it reacts to current events. 

The tax cut bill  was or is what's driving the investments in the stock market.

I follow the market enough to know one can't time a correction. I don't have the time to wait for it to come back if it does.

I honestly think a major (20%)correction would be the result of the bill not being passed .

. Of course the stock market loves the tax bill. We  know this because the money not paid in taxes will do 2 things: buy back shares which will raise the value of the stock and increase dividends. Hey, think of high how the stock market would go if all taxes on corporations, capital gains, and dividends were eliminated. 

Another case of confusing the stock market with the economy.

It's useful to recall the George Bush's tax cuts were supposed create jobs by bringing back money from abroad to promote business investments..  In fact, as subsequent analysis showed it didn't create jobs or business investment. It did put a lot more money into the pockets of the wealthy

[ilostmypassword]

Trump promised ‘America First’ would keep jobs here. But the tax plan might push them overseas.

The legislation fails to eliminate long-standing incentives for companies to move overseas and, in some cases, may even increase them, they say.

“This bill is potentially more dangerous than our current system,” said Stephen Shay, a senior lecturer at Harvard Law School and former Treasury Department international tax expert in the Obama administration. “It creates a real incentive to shift real activity offshore.”

https://www.washingtonpost.com/business/economy/trump-promised-america-first-would-keep-jobs-here-but-the-tax-plan-might-not/2017/12/15/7b8ed60e-df93-11e7-bbd0-9dfb2e37492a_story.html

[lannarebirth]

On 12/13/2017 at 6:56 PM, Pib said:

 

 

Above pretty much sums it up.  

It is a debt funded stimulus plan. Very similar to the Obama one but the middle class can at least feed a little at this trough.

[ilostmypassword]

4 minutes ago, lannarebirth said:

It is a debt funded stimulus plan. Very similar to the Obama one but the middle class can at least feed a little at this trough.

Ridiculous comparison. First off, the expenditure part of the Obama plan targeted the poor and middle class. At least the 60 percent of it that was expenditures. As for the tax break[art , I noticed that you conservatives love to point out that the poor and lower middle class pay very little in income tax. But they do pay payroll tax. And Obama had those reduced. The Republicans finally managed to kill that.

And of course, if the bill produces bigger deficits than republicans predict - and given its sloppiness it almost certainly will - there will be automatic cuts in Medicare and Medicaid. And of course, the Republicans are talking about cutting entitlements to deal with the deficit.

[lannarebirth]

14 minutes ago, ilostmypassword said:

Ridiculous comparison. First off, the expenditure part of the Obama plan targeted the poor and middle class. At least the 60 percent of it that was expenditures. As for the tax break[art , I noticed that you conservatives love to point out that the poor and lower middle class pay very little in income tax. But they do pay payroll tax. And Obama had those reduced. The Republicans finally managed to kill that.

And of course, if the bill produces bigger deficits than republicans predict - and given its sloppiness it almost certainly will - there will be automatic cuts in Medicare and Medicaid. And of course, the Republicans are talking about cutting entitlements to deal with the deficit.

 

I hope you're not still waiting on one of those "shovel ready jobs" that the last stimulus was promising.  Anyhow, I'm not a political conservative. I'm just a middle class taxpayer. Near as I can figure I save about $7,500/year on this plan as I believe it gets rid of the individual mandate on health insurance. I'll still pay just under $20k/yr which pisses me off no end regardless of which party is in power. I'd rather the money go toward single payor plan.  It is still a bad tax plan for America however; as have been all the rest that didn't lead to balanced budgets.

Edited December 16, 2017 by lannarebirth

[Langsuan Man]

How any intelligent person not see that this tax plan is a shell game is beyond me

 

The fact that the Business tax reductions are permanent and the Individual tax reductions are temporary should tell you exactly what this is all about 

 

Voters may forget a lot of things between elections but they are going to crucify the Republicans in the 2018 mid term elections since they will see the result of the massive giveaway,  that won't create jobs,  but will enrich stockholders

 

Edited December 17, 2017 by Langsuan Man

[ilostmypassword]

11 hours ago, lannarebirth said:

 

I hope you're not still waiting on one of those "shovel ready jobs" that the last stimulus was promising.  Anyhow, I'm not a political conservative. I'm just a middle class taxpayer. Near as I can figure I save about $7,500/year on this plan as I believe it gets rid of the individual mandate on health insurance. I'll still pay just under $20k/yr which pisses me off no end regardless of which party is in power. I'd rather the money go toward single payor plan.  It is still a bad tax plan for America however; as have been all the rest that didn't lead to balanced budgets.

Nice soundbite analysis. But the University of Chicago, hardly a center of liberal economic thought,  did an ideologically wide ranging survey of the nation's leading economists asking them if unemployment was lower than it otherwise would have been thanks to Obama's stimulus bill. 36 out 37 said it did.

http://www.igmchicago.org/surveys/economic-stimulus-revisited

The only economist who didn't, Alberto Alesina, was clearly a man who agreed with you. Alesina was the proponent of something called "expansionary austerity. The notion that cutting government expenditures will actually help the economy grow. The Eurozone followed his prescription. We've seen how that worked out.

[attrayant]

Using his own tax return, Eric Schoenberg of the Patriotic Millionaires group shows how the tax plan benefits the wealthiest at the expense of the non-wealthy:
 

 

[Jingthing]

The con man president's biggest con yet. Ran as a populist and delivered for his own business and family. Lock him up!

Sent from my Lenovo A7020a48 using Thailand Forum - Thaivisa mobile app

[lannarebirth]

13 hours ago, ilostmypassword said:

Nice soundbite analysis. But the University of Chicago, hardly a center of liberal economic thought,  did an ideologically wide ranging survey of the nation's leading economists asking them if unemployment was lower than it otherwise would have been thanks to Obama's stimulus bill. 36 out 37 said it did.

http://www.igmchicago.org/surveys/economic-stimulus-revisited

The only economist who didn't, Alberto Alesina, was clearly a man who agreed with you. Alesina was the proponent of something called "expansionary austerity. The notion that cutting government expenditures will actually help the economy grow. The Eurozone followed his prescription. We've seen how that worked out.

Let's see. Did spending close to $800 Billion create more jobs than not spending $800 Billion?  Yeah, that will create some jobs, even if you throw it out of the back of a truck traveling down Main St. in every town in America. I'm surprised one of the economists wouldn't agree with that premise. The point I was making is that it was a poor deployment of the $800 Billion. Very poor ROI for the money spent.

 

 

[ilostmypassword]

5 hours ago, lannarebirth said:

Let's see. Did spending close to $800 Billion create more jobs than not spending $800 Billion?  Yeah, that will create some jobs, even if you throw it out of the back of a truck traveling down Main St. in every town in America. I'm surprised one of the economists wouldn't agree with that premise. The point I was making is that it was a poor deployment of the $800 Billion. Very poor ROI for the money spent.

 

 

But you have provided no evidence. Just your opinion that it provided a low retun.  And you have got your central fact here massively wrong. almost 40 percent of that 800 billion was in the form of tax cuts. So the expenditure was actually around 550 billion. That's the kind of falsehood you end up swallowing if the source of your news is mainly right wing media.

[ilostmypassword]

5 hours ago, lannarebirth said:

Let's see. Did spending close to $800 Billion create more jobs than not spending $800 Billion?  Yeah, that will create some jobs, even if you throw it out of the back of a truck traveling down Main St. in every town in America. I'm surprised one of the economists wouldn't agree with that premise. The point I was making is that it was a poor deployment of the $800 Billion. Very poor ROI for the money spent.

 

 

Most of those economists also said that the benefits outweighed the costs.

[ilostmypassword]

I just found this comment about the Republicans' plan from an impeccable source:

"To them that have much, even more shall be given. To them that have little, even that shall be taken away."

 

Edited December 18, 2017 by ilostmypassword

[Berkshire]

On 12/14/2017 at 7:49 PM, riclag said:

 

 Nobody talks about the most important thing to take away from this is that trillions of dollars in 401k's could be in jeopardy or lost if the stock market crashed just because the  Middle Class tax cut wasn't passed.

 

The "most important thing"....?"  If the GOP would just come out and say that this tax bill is about helping the shareholder class--not even the corporations themselves--then at least they're being straight with the American people.  Did you know that shareholders in the US stock market are over 35% foreign?  So much for helping the American middle class.  Never mind that this tax bill is helping the rich much more than the middle class and poor, it's also not going to help small businesses the way the Republicans are trying to sell it.  What a gigantic scam this tax bill is.

 

https://www.yahoo.com/news/robert-reich-three-big-lies-104307461.html?.tsrc=jtc_news_index