Here’s what’s in it, what the President says, what Yellen says, and reasons it may not even pass the vote…
First, President Trump is in a full court press to get his first major victory before the end of the year.
Just moments ago:
As a candidate, I promised we would pass a massive tax cut for the everyday, working Americans. If you make your voices heard, this moment will be forever remembered as a great new beginning – the dawn of a brilliant American future shining with PATRIOTISM, PROSPERITY AND PRIDE! pic.twitter.com/exsBzrlCdw
— Donald J. Trump (@realDonaldTrump) December 14, 2017
Here’s how the final bill is shaping up from Zero Hedge:
- CORPORATE TAX RATE: Falls to 21 percent from 35 percent. The House and Senate bills, as well as Trump, had earlier proposed 20 percent. Going to 21 percent gave tax writers more federal revenue needed to make the tax cut immediate. U.S. corporations have been seeking a large tax cut like this for many years.
- PASS-THROUGH BUSINESSES: Creates a 20 percent business income deduction for owners of pass-through businesses, such as sole proprietorships and partnerships. The House had proposed a 25 percent tax rate; the Senate, a 23 percent deduction.
- CORPORATE MINIMUM: Repeals the corporate alternative minimum tax, which was set up to ensure profitable companies pay at least some federal tax.
- TOP INDIVIDUAL INCOME TAX RATE: Falls to 37 percent from 39.6 percent. The House had proposed maintaining the 39.6 percent top rate and condensing the current seven tax brackets to four. The Senate had proposed cutting the top rate to 38.5 percent and maintaining the seven brackets.
- PERMANENCE: The expectation is individual tax rates will snap back to current levels in less than 10 years. The individual tax rates in the House bill were permanent. The individual tax rates in the Senate bill would have expired after 10 years.
- STATE AND LOCAL TAX (SALT): Both the House and Senate had proposed scaling back a popular individual deduction for state and local tax payments by limiting it to property-tax payments and capping it at $10,000. The compromise bill is expected to keep that cap, but also allow for continued deduction of state and local income tax payments.
- MORTGAGE INTEREST: Caps the mortgage interest deduction at $750,000 in home loan value, down from the current $1 million. The House had proposed a $500,000 cap. The Senate bill left it at $1 million.
- ESTATE TAX: Roughly doubles the exemption from the federal estate tax on inherited assets to about $11 million, but leaves the tax in place, mirroring the Senate proposal. The House bill had raised the deduction, but also entirely phased out the tax.
OBAMACARE MANDATE: Repeals a federal fine imposed on Americans under Obamacare for not obtaining health insurance coverage. The House bill did not repeal the Obamacare individual mandate.
ANWR DRILLING: Allows oil drilling in Alaska’s Arctic National Wildlife Refuge. The provision was sponsored by Republican Senator Lisa Murkowski of Alaska.
Here’s Michael Snyder discussing potential “no” votes that could block the tax bill’s passage in Congress:
Sadly, it is not a slam dunk that this bill will actually get through the Senate.
Senator Bob Corker voted against the original Senate bill, and he may vote against this version too.
Ron Johnson of Wisconsin and Susan Collins of Maine have also expressed reservations about this bill, and it is unclear how they will vote at this point.
And let us not forget that Senator John McCain’s health is rapidly failing. Hopefully he would be present for any vote, but there is no guarantee that will happen.
In the end, Republicans can only lose two votes in the Senate, and so this is going to come down to the wire.
Yesterday we put out a piece about the lofty projections from the Treasury Department. To say the projections are lofty is an understatement.
Finally, here’s what outgoing Federal Reserve Chair Janet Yellen has to say about the tax cuts during her press conference yesterday.