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Republican Tax Plan: 8 things to know

Two days ago on Thursday, November 2, House Republicans unveiled their tax reform plan. Overall, it’s an improvement from the current tax system, which is massively complex for individual tax-filers.

Ben Shapiro of The Daily Wire has simplified the proposed tax plan for us into 8 points:

1. Corporate Tax Cuts Are Slashed Dramatically. The proposal lowers the corporate tax rate from 35% to 20%. That puts America in line with the U.K. rather than above virtually every other industrialized country. Meanwhile, pass-through corporations will see their tax rates reduced from 39.6% to 25%.

2. Individual Tax Rates Change, But Not An Enormous Amount. Instead of the current seven-bracket system, the number of brackets is reduced to four. High income earners will earn a slight reprieve for income between $418,400 and $500,000 (the top tax bracket now kicks in at $418,400); earnings of between $200,000 and $500,000 will be taxed at 35%, meaning a slight increase for some of those households; between $45,000 and $200,000, tax rates will be 25%; below $45,000, the income tax rate will be 12%.

3. The Bill Kills Medical Expense Itemized Deductions, As Well As Adoption And Student Loan Interest. This will be the provision the Democrats choose to target: if you have extraordinary health care costs, some of these costs will no longer be deductible. The tax deductions for adoption and student-loan interest also go away.

4. The Bill Limits Mortgage Deductions. The bill will reduce the amount of mortgage interest deduction available from loans up to $1 million to loans up to $500,000. This will particularly smash people who live in high real estate value areas, which just happen to be blue overall.

5. Executive Compensation Becomes Less Deductible. As The Wall Street Journal points out:

Businesses would lose the ability to deduct certain executive compensation above $1 million, which they can now do for performance-based pay.

That means bonuses are no longer deductible for CEO, CFO and the “three other highest paid employees” at a company.

6. The Tax Reform Package Repeals The So-Called Johnson Amendment. The Johnson Amendment penalizes 501(c)3 religious organizations for supposed electioneering; now, the law will allow religious organizations to speak politically “assuming the speech is in the ordinary course of the organization’s business and its expenses are de minimis.”

7. The Child Tax Credit Increases…Some. While some Republicans wanted the child tax credit increased to $1,800, the bill increases it to $1,600. The House bill also creates a $300 tax credit for non-child dependents, but those are phased out in 2022.

8. Removing State Tax Deductibility. Right now, you can deduct the amount you pay in state taxes from your federal income. This bill would remove that capacity, slamming those who live in high-tax “blue” states like New York and California.

~Eowyn

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22 responses to “Republican Tax Plan: 8 things to know

  1. Yup the tax code now equals 13 Bibles, because its been simplified. And if you make over 45,000, you robber barons the government claims 25%. When instituted the tax applied to millionaires and the max tax was 4%. Get the picture saps.

    So sheeple, the government will double tax your social security,, tax your property and then double tax your income but the government will double your individual deduction, for the first time since 1957, and increase your child’s deduction by about what what his health costs are.

    But tax the Ford foundation or Havard? Eliminate the tax loopholes that allow the rich to pay less than someone who has to pay at the 25% rate though they earn 20-50x times what you do? Or eliminate the earned income tax credit-giving your tax dollars away to people who haven’t earned it?

    Step right up suckers, have we got a deal for you.

    How about 10% flat tax, no deductions, no exemptions for all.

    Liked by 1 person

    • “How about 10% flat tax, no deductions, no exemptions for all.”
      I still can’t see why a flat tax isn’t fair to all. Even 15%,but still a FLAT Tax. All I can figure is the Government refuses to allow FAIR taxation,because THEN THEY’D HAVE TO GO ON A DIET. Well,they SHOULD be on a diet ANYWAY. And we need to make it POLICY that Congress is limited to TWO terms,and can’t run for “other” offices when they limit out. (i.e. running for a Senate seat once they’re out of the House)

      Liked by 2 people

    • We the people have to stop dancing to their music; quit playing their games. Enough of this bs.

      Liked by 1 person

  2. It is at least a step in the right direction. More than we have seen in decades. We have to take what small victories that we can. They don’t come often.

    Liked by 1 person

    • This isn’t a victory but your nonsense comment is what I have expected from you. No one should be paying any income tax to the US government. There should be no earned income credit either. Maybe one day you will start to see the light.

      Like

      • True enough,but sometimes you can’t HAVE what you really want;sometimes you have to accept what improvements you can get at the time. There’s no reason that can’t be improved upon at a later date.
        Personally,I think Constitutional Carry should rule in every State,but I know that’ll take a while to accomplish,so until then,CCW Reciprocity is better than nothing.

        Like

      • BTW-Have YOU stopped paying your Taxes yet? Did you refuse to use your Earned Income Credit every year?
        What there SHOULD be and what there IS are often at odds. But okay-Go ahead and quit feeding the machine. Maybe by pursuing what SHOULD be,others will join the movement and the Government will re-structure itself to accommodate your wishes.

        Liked by 1 person

        • I don’t get the earned income credit. These provisions are enticements to keep people locked into a fraudulent system. By the way, are you another poster? If not, please avoid the snark.

          Like

  3. Thank you for doing all the work I would not have done. I have just a couple of ideas, the first hopefully bringing to an end the Supreme Court decision declaring personhood of corporations. If corporations are really people, tax them at the same rates as real people or else reverse the absurd decision. Second, I don’t look forward to tax deductions for religions seeking overthrow of our government through sharia or anything else. Based on the past, it is possible that those threats would be ignored while bland words from Christians are deliberately “misunderstood.”

    Liked by 1 person

    • ” “assuming the speech is in the ordinary course of the organization’s business and its expenses are de minimis.” ”
      That will still put a lot of limits on churches/political activity.
      Of course, it’s all dependent on real enforcement.
      We currently have faaaaaarrrrrrrrr too many electoral laws that are not enforced.

      Like

  4. For 70+ Years, both those A-Hole Demo-rats & those spineless Repugnables have been promising & delivering TAX cuts, implementing TAX reforms, cutting TAX brackets – yet I pay more & more TAX on the very same income amount.. – and YOU want me to Explain how they Fool-All-the-People-All-of-the-Time…??? – Go up-stairs and check with your common sense analyitical department for an answer..!!

    Liked by 1 person

  5. The dems can’t really complain too much, they just squandered 8 years doing nothing for the people or their country. They only padded their pockets. They reap what they sow and I will take any tax break right now.

    Like

  6. Just based on what you posted, I can agree with almost all of it

    Liked by 1 person

  7. Don’t forget, the GOP tax reform kills the death tax by 2024.

    So families that have worked hard, owned a business, scrimped, saved & invested, or whatever to provide a better life for their children will no longer get taxed AGAIN on those savings & investments.

    Liked by 1 person

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