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Thursday, December 14, 2017

Tax cut means bigger paychecks in February

Republicans should have had this done by now, but it looks like the tax cut bill will be signed by Christmas.

“It’s critically important for Congress to quickly pass these historic tax cuts. If Congress sends me a bill before Christmas -- this is breaking news -- the IRS has just confirmed that Americans will see lower taxes and bigger paychecks beginning in February,” President Trump said.



The process has been pretty open as senators and representatives work on a compromise.

The key politically is the doubling (or near doubling) of the standard deduction,which three-quarters of all taxpayers take.

Doing that will wipe out the tax bill for millions of Americans.

But the key to America's long-term economic health is reducing the corporate tax from 35 percent to 20 percent. Some reports have it at 22 percent.

From Bloomberg:
“I’m just very excited by” the bill, the president said. “This is one of the biggest pieces of legislation ever signed by this country.”
Lawmakers are also leaning toward keeping the estate tax, the official said. Both chambers called for doubling exemption limits for the tax, but the House bill calls for its full repeal in 2025. Negotiators are also planning to set a top individual tax rate of 37 percent -- a reduction from the current 39.6 percent and a lower rate for high-income filers than in either the Senate of House versions of the overhaul, according to the official.
The mortgage deduction limit would drop to $750,000 from the current $1 million, according to the official.
Given how little the economy gains by dropping the top marginal rate to 37%, I would leave it alone. That would end criticism that it is a tax cut for the rich.

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11 comments:

  1. Again, no skin ing the game. The one thing I would like to see is the elimination of the deduction for state and local taxes. Keeping fingers crossed.

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  2. Bigger paychecks AND bigger deficits. MAGA. Regarding the deficit, fine by me but I have yet to hear anyone explain how allowing $1.5 trillion being added to the deficit is a "conservative" value.

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    1. Yeah, government stealing your money and giving it to other people is conservative. We need to have more of it taken away.

      Funny how the Keynes money multiplier idea only applies to government spending, and never to private initiative.

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    2. Tax cuts always end up bringing in more revenue. Ask the IRS.

      But that would blow his gripe about "conservative" values.

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    3. Ed - provide a credible link or two to back your ask the IRS assertion.
      So "balancing the budget" and "living within our means" is no longer a conservative and/or R talking point?

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    4. Liberals never mind spending other peoples money,as that government check always comes in,right.Never worried about how obama spent the original 1 Trillion stimulus money every year for eight years.

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  3. Anonymous assumes that increased economic growth from tax reform and tax revenue derived from taxing that increased growth will offset the projected deficit. I do. Anon is being disingenuous or deceitful (take your pick) or possibly just incompetent when he uses that 1.5 trillion deficit projection because he or she conveniently leaves that that sum is a ten year projection, not an annual projection. Let's compare that projection annually (150 billion) to everyone's hero, Obama, who ran up ten trillion over eight years in deficits (that's 1.25 trillion annually, for those keeping count). Thanks for playing. See you next year. JPG

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    Replies
    1. No credible proof that trickle down has, or will, work. hmmm. Still no answers my question: when/how is adding enormously to the federal deficit a "conservative" staple.

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  4. The Reagan tax cuts brought in more revenue and paid for themselves. Alas, Congress just spent more money. - GOC

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