Republican-controlled U.S. Congress poised to approve biggest tax system overhaul in 30 years

“The Republican-controlled U.S. Congress will begin voting on Tuesday on the biggest overhaul of the U.S. tax system in more than 30 years, with little standing in the way of the party’s first major legislative triumph under President Donald Trump,” David Morgan and Amanda Becker report for Reuters.

“The House of Representatives, which introduced initial tax legislation barely six weeks ago on Nov. 2, was scheduled to vote on Tuesday afternoon. Senate Majority Leader Mitch McConnell said his chamber would vote on Tuesday evening,” Morgan and Becker report. “With strict party-line votes expected in both chambers, passage appeared all but certain.”

“Lingering doubts about fate of the tax bill all but vanished on Monday after two of the last Senate Republican holdouts, Susan Collins and Mike Lee, agreed to support the legislation,” Morgan and Becker report. “The House, where Republicans hold a 239-193 voting majority, was likely to see a smattering of ‘no’ votes from Republican fiscal hawks and lawmakers from the high-tax states of New York, New Jersey and California who oppose a provision that would scale back a popular deduction for state and local taxes. Vice President Mike Pence took the precaution of rescheduling a trip to Egypt and Israel for January so he would be on hand this week in case his tie-breaking voting power is needed to ensure Senate passage of the bill. The legislation also would repeal a federal fine imposed on Americans under Obamacare for not obtaining health insurance coverage, a change that could undermine the 2010 healthcare law formally known as the Affordable Care Act.”

Read more in the full article here.

“Middle-income households will get $61 billion in tax cuts in 2019 under the Republican tax plan poised for passage this week, according to an analysis released late Monday by Congress’s Joint Committee on Taxation,” Siobhan Hughes and Shayndi Raice report for The Wall Street Journal. “That amounts to 23% of the tax cuts that go directly to individuals.”

“The calculations are based on JCT estimates of cuts going to households that earn $20,000 to $100,000 a year in wages, dividends and benefits. Those households account for about half of all U.S. tax filers, with nearly a quarter making more and a quarter making less,” Hughes and Raice report. “America’s most-affluent households, those earning $500,000 or more a year, which account for 1% of filers, would also get $61 billion in cuts in the first year, according to the JCT analysis.”

Hughes and Raice report, “Much of the rest would go to businesses in the form of corporate tax cuts, according to the JCT analysis.”

Read more in the full article here.

Apple CEO Tim Cook and U.S. President Donald Trump at tech summit in June
Apple CEO Tim Cook and U.S. President Donald Trump at tech summit in June
“If this bill passes, it would be a huge win for U.S. corporations, especially iPhone maker Apple,” Madeleine Johnson writes for Zacks. “According to Richard Waters and Tom Braithwaite at the Financial Times, Apple could stand to make as much as $47 billion from the Republican tax legislation. Here’s how that number was calculated: Apple, under current tax laws, would have to shell out $78.1 billion in order to bring its $252 billion in foreign cash and investments back to the U.S. But under the Senate plan, the company would only have to pay $31.4 billion on its past overseas earnings. That difference equals a $47 billion windfall.”

“While these numbers are based on the Senate’s plan of a 20% corporate rate [it’s since been set to 21%], the eventual profit amount Apple could reap is huge,” Johnson writes. “‘Overall, companies like Apple will be happy with [the bill]. They are a getting a territorial system and a lower rate. It’s a good deal,’ Villanova University tax professor Richard Harvey told the Times.

Read more in the full article here.

MacDailyNews Take: The importance of the U.S. finally moving to a territorial system cannot be overstated.

As we’ve been saying for many years now, and hopefully for not much longer, the U.S. corporate tax rate is obviously way too high and anachronistic.

Under the current U.S. corporate tax system, it would be very expensive to repatriate that cash. Unfortunately, the tax code has not kept up with the digital age. The tax system handicaps American corporations in relation to our foreign competitors who don’t have such constraints on the free flow of capital… Apple has always believed in the simple, not the complex. You can see it in our products and the way we conduct ourselves. It is in this spirit that we recommend a dramatic simplification of the corporate tax code. This reform should be revenue neutral, eliminate all corporate tax expenditures, lower corporate income tax rates and implement a reasonable tax on foreign earnings that allows the free flow of capital back to the U.S. We make this recommendation with our eyes wide open, realizing this would likely increase Apple’s U.S. taxes. But we strongly believe such comprehensive reform would be fair to all taxpayers, would keep America globally competitive and would promote U.S. economic growth.Apple CEO Tim Cook, May 21, 2013

SEE ALSO:
GOP tax cut plan sets 15.5% repatriation rate on offshore cash; 8% if invested in plants and equipment – December 16, 2017
GOP eyes taking bigger bite from Apple, others holding cash overseas to seal President Trump’s tax cuts – December 15, 2017
Apple could be biggest beneficiary of Republican tax reform plans, saving at least $47 billion – December 6, 2017
Dow soars 203 points higher to record as Wall Street cheers U.S. Senate passage of major tax bill – December 4, 2017
Oracle joins Apple in support of President Trump’s tax repatriation plan – November 7, 2017
President Trump’s tax cuts could be YUGE for Apple – September 28, 2017
GOP tax plan calls for cutting the corporate tax rate from 35 percent to 20 percent – September 27, 2017
Goldman Sachs sees $1 trillion in U.S. tax cuts coming – September 20, 2017
Apple will eventually bring billions of dollars back to the U.S. under President Trump’s tax reform plan – July 21, 2017
President Trump’s tax reform plan includes deep cuts in corporate taxes – April 26, 2017
Apple could be primed for profit explosion under President Trump’s big tax cut – April 26, 2017

53 Comments

  1. We’ll be voting all the greedy deplorables out. They’ve already sealed their own doom- maybe everyone else’s, too- whatever comes first. Once again, thanks MDN for driving people away now or in the near future with your rightwing politically biased coverage. I suppose Limbaugh’s checks continue to be cashed and rationalized….

        1. So let me get this straight, the rest of the world’s governments did not and will not hear about the US lowering it’s corporate tax rate. And, so, they will not lower their tax rate, well, cause they don’t know and did not hear.

          Apple, and other corporation are going to bring the money they have overseas to the US, cause they can now only 15 percent or eight percent if they build plants. HMM.

          My understanding is Apple is getting one heck of a rate on the money they are borrowing, 1+ percent. Now, let me see if I have this right, Apple will pay 15 percent or, or, eight percent to bring that money to the US. Yeah, any corporation that would do that I would suppose would be looking for a new CEO and CFO quick and in a hurry.
          I imagine other companies are able to borrow at such low rates too. So, So, why are they going to bring that money back?

          Americans just got suckered. This will cause pressure on other countries to lower their rates. The only winners here a the worlds rich.

          You know how this goes, boom, bust, war. BOOM, BUST, WAR! History repeats itself.

    1. “… your rightwing politically biased coverage.”

      If their coverage is so rightwing why do you leftwing pansies keep coming here en masse? According to all of the wailing from you clowns it’s the end of the world as we know it.

  2. At least 60% of people will have their taxes go up. 13 million will lose their healthcare. Many deductions will be removed or reduced. The wealthy and corporations will receive massive tax breaks, which they will keep. No new jobs for you.

    Think about that the next time you think of upgrading your two year old phone or replacing a three year old HDTV becasue you want one just a little bit bigger. It’s all just going in the pockets of corporations who now with the lower taxes and tax loopholes will pay a tax rate lower than some poor or less.

    They got their tax cut, so you don’t need to send them anymore of your money (less money now) by purchasing their items. They’ve already stolen enough.

    1. Sorry bjr001… that’s simply factually not true. Not even close. You’re buying the lies and propaganda of the left, who would do anything to stop this bill from passing as it will make the Dems look very bad.

      Again, you are spreading a lie. Most Americans will see their tax bill go down. Period.

      1. Taxes may go down, Pirate, but overall costs will go up. The average Joe may end up losing purchasing power as a result.

        Lies and propaganda are not one-sided. If you believe everything that Trump and the GOP is claiming about this legislation, then you are the one that is deluded.

        Democrat…Republican…I don’t really give a crap who is pushing this legislation. The source does not alter the inherent merits or warts of the legislation. What really sucks is all of the secret, back-room deals employed to buy voted at the expense of the country.

        With some bipartisan work, this bill could actually be evolved to be a good thing. It needed to start from a revenue neutral basis. I would not reduce the business rate to 21%, for instance. I would gladly accept 25% along with the elimination of the vast majority of business deductions. The same goes on the personal tax side of the equation.

        This legislation is simply a work of desperation by an incompetent Congress combined with grandstanding by Trump so that he can claim a win, despite the fact that this bill goes against most of what he promised over the past two years.

        The benefits that Trump and the other ultra-rich will receive from this legislation in one year will likely outweigh the lifetime earnings of even an upper middle-class worker. Then, when they die, they will avoid another $4M in inheritance taxes on top of that…

        America is gradually devolving towards feudalism dominated by the 1% nobility. About 90% of U.S. citizens are destined to be serfs and the remaining 9% or so functionaries at the pleasure of the nobility. Welcome to the descent to medieval America.

  3. Great day to celebrate. Corporations are tax collectors for the government, anyhow. Corporations don’t pay taxes, people do. The libtards have been fooled for so long.

    1. At least when corporations pay taxes, the owners (shareholders) theoretically share some of that burden via a reduction in profits. When corporate taxation is reduced, then who pays it? The answer (if the tax cut were not financed by irresponsible borrowing) is the individual worker. You might think that a company might increase wages to compensate workers. But the truth is that the additional profits will mostly be distributed to shareholders in the form of dividends and such. In all likelihood, the wealthy will end up paying a lower marginal tax rate on that income than the average middle class worker.

      This legislation is essentially the third phase of the concentration (reverse redistribution) of wealth by the GOP. Step 1 was Reagan. Step 2 was Bush2. Step 3 appears likely to be Trump. Steps 1 and 2 led to massive increases in the federal deficit and massive economic crashes. What makes *anyone* think that the results of Step 3 will be any different?

      I rely upon physics, math, and logic. Anyone who supports this legislation relies upon incredibly misguided wishful thinking. You are ruining the future of this country for my children, and I resent that very much.

    2. Democrats have too long been blinded by the hatred they’re fed to understand that simple fact.
      No business “pays” taxes.
      All businesses collect taxes, from YOU, on the behalf of government.

  4. All politics aside, here is the big picture:

    1- Smallish permanent corporate tax cut.
    2- Small temporary personal tax cut that expires and pushes working class and middle class Americans to higher tax brackets over time- a net tax increase.
    3- A massive permanent tax cut for the wealthiest Americans. This scheme does nothing to change the fact that investment income is taxed at a much lower rate than wages, salary and tips.

    :large

    End Results:
    -There are more tax brackets- not fewer.
    -The deficit will increase under every scoring method.
    -The Republican will use the resulting deficit as a cudgel to attack various spending programs and have already telegraphed their intent.

      1. Actually the last published set shows 40% tax rate as the highest.

        As to corporate- nobody pays the listed rate under the current system- the effective rate in the US is actually quite normal for an OECD country.

        This is payday for the Kochs , Adelsons and other GOP benefactors.

        1. Not to mention all the hollywood jetsetting movie stars, moguls, and democrat millionaire politicians, current a past that carry an entourage of bully protectors wherever they go.

          These guys and gals have you in their pocket and they love it.

          Democratic politicians live under the theme of social justice and caring for the lower class and middle class but it is so full of hypocrisy because of their solution flying machines and money using schemes for their own purposes under the guise of working for you. I NEVER hear a liberal middle or lower class complain about the money hollywood and Dem politicians have and use for their own benefit or the solution of their private jet setting trips.

          Come on, if you are so upset with what the republicans are doing, at least tell your dem partners the same. The truth is, the Dem politicians are verbally and visibly against the tax breaks for you to elect them again, but they secretly WANT it for their own benefit.

    1. DavGreg –

      Don’t get hung up on the word “permanent”. Nothing is permanent. It’s just a word that does not mean anything.

      Thanks for noting that spending programs may be cut. That will be another day to celebrate.

      1. Re 7 of 9:
        Actually because of chained CPI in the bill, lower and Middle income Americans will be subject to bracket creep PLUS the end of reduced rates and will se a net increase every year afterward. Otherwise, the math used to calculate the tax tables will be different and intentionally understate the CPI and steadily march many into higher tax brackets.

        You are not doing your homework or are just repeating what some pundit has said. Multiple non partisan reviews show this as a significant tax increase for Middle and Working Class Americans.

  5. Parts of the bill are good but so much of the tax cuts go to the wealthy. Plus, those tax cuts are paid for by going further in debt.

    It really looks like the bill is designed to give more money to the rich. The poor get very little.

    One example, a family making over $400,000 a year will get a $4,000 tax credit per child (presumably $2,000 more over the existing credit) versus a family making less than $30,000 which gets an additional $75.00 per child. Why do that?

    The poor and middle class are getting shafted over the ten year period covered by the bill. The first two years are okay for most people but then the rates adjust and just about all of the tax cuts go to the wealthy. The bill strikes me as mean-spirited.

    I don’t think it is good for the country as a whole.

    1. JWW… Not sure where you get your facts. But if they’re coming from CNBC (as it looks below), then you should recognize that the mainstream media has an incentive to lie to you.

      Frankly, I don’t have time to explain economics and the tax code to you, but I will advise you that the data you stated is just not accurate. Start here: do high income families qualify for tax credits at all? Do they claim them? Facts matter.

    2. The fact that someone you despise gets a break is Irrelevant.
      Class warfare, promoted by democrats, serves but one purpose, and that’s to make you irrational with hatred.
      Someone else, somewhere, gets a break.
      So what.

  6. People on the left will emote, demonize groups and politicians – but the math is simply that – it doesn’t take political sides, and what the left politico’s fear, is what they feared with Reagan – tax cuts allow more people to keep more of what they have worked for, and that means more you (liberty) less government. The more people get jobs instead of unemployment or more importantly welfare and food stamps, the less the need government and leftist politicians.

    Trump should now change the way we measure employment in the country, because the current measuring stick is a joke… But he’s not smart enough to do that.

    I give the big credit to this tax plan to that of Ted Cruz, Rand Paul and others that ran, forcing it to be a big part of what Trump ran on and had to get done as a result. And for rank and file people pushing to get this done.

    1. You do not get less government, Bobby, at least not in fair proportion to the tax cuts. As a result deficits and debt rise, a fact which will eventually cripple our economy into ruin.

      Witness – tens of billions of additional spending on the military on top of the tax cuts.

  7. For all you middle class and lower class Trump supporters, you will get what you deserve. (Unfortunately, you’re not honest enough with yourself to admit that you got fukt by voting for him and the GOP congress)

    1. Daddy… perhaps you need to admit that your understanding of the tax bill is skewed by the media you watch. The lower and middle class will ALL see a reduction in taxes. Seems like exactly what Trump promised.

      1. In May 2011, Barack Obama urged Israel to hand over half of Jerusalem, the Wailing Wall, The Temple Mount, Old Jerusalem, the tomb of Jesus Christ, and the Via Dolorosa to radical Islamic organizations.

        In December of 2017, Donald Trump recognizes Jerusalem as the indisputable capital of the state of Israel.

      2. Every single democrat that ran against Trump- Proven in FBI reports, State Department reports, Wikileaks and DNC hacks to be Liars.
        You will not be unchallenged in your historical revisionism.

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