Today is the day. We are introducing legislation that will cut your taxes & make the entire system more simple. This will be a game-changer.
— Paul Ryan (@SpeakerRyan) November 2, 2017
Now who’s fucking excited?!
I’m just kidding. No one is excited except for Trump. Indeed, I’d wager that even the GOP isn’t too excited because they know what an uphill (get it? “up”.. “Hill”) battle this is going to be considering all the political capital Trump has wasted over the past 10 months by berating GOP lawmakers on Twitter.
After missing a self-imposed Wednesday deadline, the details – or, “highlights” as they’re calling them – of the plan are out. You can find the 2-page list of talking points embedded below. It proposes lowering the corporate tax rate to 20%, but you already know that. And in fact, I don’t even know why anyone is bothering to talk about this because everyone already knew all of these details ahead of time.
Here’s a summary of the summary from NY Times (more here):
- The plan establishes three tax brackets, 12, 25 and 35 percent, and also keeps a top rate of 39.6 percent for the highest-earners, collapsing the total number of brackets from seven.
- The proposal roughly doubles the standard deduction for middle-class families, expanding it to $24,000 for married couples, from $12,700, and setting it at $12,000 for individuals, from $6,530 today.
- After much nail-biting debate, the House will not make any changes to the pretax treatment of 401(k) plans.
- One of the biggest flash points will be proposed changes to the popular mortgage interest deduction. Under the Republican plan, existing homeowners can keep the deduction, but future purchases will be capped at $500,000.
- Estate tax eventually repealed, phasing it out entirely in six years.
- One of the biggest flash points will be how the bill treats the state and local tax deduction, which lawmakers are proposing to limit to property taxes and cap at $10,000. That will not be enough for Republicans in some high-tax states, where middle-class families make heavy use of the deduction.
Needless to say, this represents the last chance for Trump to actually get something done (i.e. score a legislative victory) by the end of the year. But it won’t be easy. Here’s Reuters:
The bill is the starting gun for a frantic race toward what Trump and Republicans in the House and Senate hope will be their first major legislative victory since he took office in January: the enactment this year of a package with up to $6 trillion in tax cuts over the next decade for corporations, small businesses and individuals.
Still, important issues remain unresolved and House Ways and Means Committee Chairman Kevin Brady himself predicts the initial legislation will change next week, when his panel is due to begin preparing it for an eventual House vote.
The bill must also pass the Senate, where Republicans hold a slimmer 52-48 majority and earlier this year failed to garner enough votes to pass a major healthcare overhaul. Senate Republican leaders have said they aim to finish their work on taxes by year-end.
Of course no one knows the extent to which this is feasible while staying within the $1.5 trillion increase in the deficit called for in the much ballyhooed budget resolution passed late last month.
Stocks, the dollar, and yields aren’t feeling it although they’ve bounced enough off the initial knee-jerk lower to make the charts largely meaningless – as expected. After all, there’s no clarity to be had here which is why I decided to go to the beach this morning for a few minutes rather than staring at the screen and waiting for a largely amorphous 2-pager.
Anyway, here are the talking points to do with as you see fit (there’s probably a trash can next to your desk – maybe use it)…