And all through the House… Congress formally approved—and reluctantly changed the formal name—of the Tax Cuts and Jobs Act yesterday. The House voted for a second time to pass the measure yesterday, sealing its approval. However, it looks as if President won’t be able to sign the bill until January 3.
The budget was stirring….To avoid a government shutdown on Saturday, Congress must agree to another temporary spending bill. With no agreement on a wide range of policy issues—from $81 billion in disaster relief to immigration reform and big boosts in defense and domestic spending, it looks like Congress could kick the fiscal can down the road yet again, even though the government is already one-third into the fiscal year. But they're having trouble securing GOP votes in the House.
Legislation delayed till next year with care… Senators Lamar Alexander and Susan Collins will have to deal with their desired health care legislation in January, rather than attaching the measures to the end of year spending bill. The legislation would restore cost sharing reduction payments to insurers and fund "reinsurance" programs that could help lower insurance premiums. The senators said that early next year “the Senate will consider the omnibus spending bill, the Children’s Health Insurance Program reauthorization, funding for Community Health Centers, and other legislation that was to have been enacted this week.” The White House and Senate GOP leaders promised to support Collins’s efforts in return for her vote on the tax bill. But House Republicans are not on board. Trump didn’t make things easier yesterday by gloating that by ending the ACA’s individual mandate, the tax bill “essentially repealed Obamacare.”
Benefits for “small businesses?” Plenty to spare. The New York Times offers a graphic illustration of how the TCJA’s “small business tax cut” will cut taxes for the wealthy. Millions of taxpayers, including those at the highest income levels, will benefit from a 20 percent deduction for pass-through income. TPC’s Joe Rosenberg also has an illustration of who benefits.
Visions of a VAT or carbon tax could dance in your head. And TPC’s Howard Gleckman poses a thought experiment: “Imagine that Democrats control the White House and at least one chamber on Capitol Hill in 2025. And imagine the debt has increased to about 90 percent of Gross Domestic Product, a fair assumption after taking into account the lost revenue from the TCJA.” Congress would need revenue to keep the TCJA’s individual tax cuts on the books. Would it enact a Value-Added Tax, or a carbon tax? It’s anybody’s guess.
The President awaits a pat (or two) on the back. AT&T, in the midst of an anti-trust battle with the Trump Administration over the media giant’s attempt to acquire Time Warner, seems to be offering a tax-related olive branch to the president. The company announced it will give its workers $1,000 each and boost domestic capital investment by $1 billion, once Trump signs the TCJA. Comcast followed suit, just hours later.
Dash away, dash away, dash away all… Remember the TCJA’s base-broadening? There wasn’t much and it didn’t last long. Senate Finance Committee Chair Orrin Hatch dropped a bill to extend a long list of special interest tax breaks, including subsidies for energy companies, race horse and race track owners and others. Most expired at the end of 2016. Hatch would restore them, make some permanent, and continue others for two or five years.
Tax preparers: Go straight to your work. The IRS reminds federal tax return preparers that they must renew their Preparer Identification Numbers that expire on New Year’s Eve. Anyone who prepares any federal tax return or claims refunds for compensation, must get a valid 2018 PTIN that must be used as the identifying number on returns. Get started at www.irs.gov/ptin — the process takes only a few minutes online, and requires no fee.
If you’d like to tell us about a new research paper or have any comments about the Daily Deduction, TPC’s summary of the day’s tax news, write Renu Zaretsky at [email protected]. You can sign up here to receive the Daily Deduction as an email newsletter every weekday morning (Mondays only when Congress is in recess) at 8:00 am.
