U.S. House Ways and Means Committee
November 2, 2017
Chairman Brady Introduces the Tax Cuts and Jobs Act
Legislation to Overhaul America’s Tax
Code for First Time in 31 Years Will Deliver More Jobs, Fairer Taxes,
Bigger Paychecks
WASHINGTON, D.C. – Today, House Ways and Means Committee Chairman
Kevin Brady (R-TX) introduced the Tax Cuts and Jobs Act – bold
legislation to overhaul America’s tax code for the first time in 31
years. With this bill, a typical middle-income family of four, earning
$59,000 (the median household income), will receive a $1,182 tax cut.
Upon introducing the Tax Cuts and Jobs Act – co-sponsored by Speaker
Paul Ryan (R-WI) and all Ways and Means Committee Republican Members –
Chairman Brady said:
“Today marks the beginning of the end of our nation’s broken tax code.
The Tax Cuts and Jobs Act will deliver real tax relief to Americans
across the country – especially low- and middle-income Americans who
have been struggling for far too long to earn a raise and get ahead.
“Our legislation is focused entirely on growing our economy, bringing
jobs back to our local communities, increasing paychecks for our
workers, and making sure Americans are able to keep more of the money
they earn.
“For families, we’re lowering rates, eliminating costly deductions that
drive up taxes, and significantly increasing the standard deduction to
protect more of each paycheck from taxes. We’re boosting family-focused
tax benefits like the Child Tax Credit to help families keep up with
the rising costs of child care, higher education, and looking after
their loved ones. And we’re eliminating taxes that punish hardworking
families like the Alternative Minimum Tax.
“Our legislation also delivers unprecedented simplicity that will make
it easier and more affordable for families across our country to file
their taxes each April. For the first time in history 9 out of 10
of Americans will be able to file their taxes on a form as simple as a
postcard.
“And we’re making America competitive again so our workers can compete
– and win – anywhere in the world, especially here at home. By
delivering tax relief to businesses of all sizes, the Tax Cuts and Jobs
Act makes it easier for entrepreneurs to achieve the American Dream –
to start a business and create jobs in our local communities, and it
entices employers to bring their headquarters and jobs back home.
“We made a promise to deliver tax reform that creates more jobs, fairer
taxes, and bigger paychecks. After years of work, the Tax Cuts and Jobs
Act is our answer.
“The legislation is now available online so our workers, families, and
job creators can see how tax reform will improve their lives. I’m
confident in the weeks ahead we will move this important legislation
forward and work with the Senate to send a unified bill to President
Trump’s desk by the end of the year.”
For
individuals and families, the Tax Cuts and Jobs Act:
Lowers individual tax rates for low-
and middle-income Americans to Zero, 12%, 25%, and 35% so people
can keep more of the money they earn throughout their lives, and
continues to maintain 39.6% for high-income Americans.
Significantly increases the standard
deduction to protect roughly double the amount of what you earn
each year from taxes – from $6,350 to $12,000 for individuals and
$12,700 to $24,000 for married couples.
Eliminates special-interest deductions
that increase rates and complicate Americans’ taxes – so an
individual or family can file their taxes on a form as simple as a
postcard.
Takes action to support more American
families by:
Establishing a new Family Credit –
which includes expanding the Child Tax Credit from $1,000 to
$1,600 to help parents with the cost of raising children, and providing
a credit of $300 for each parent and non-child dependent to help all
families with their everyday expenses.
Preserving the Child and Dependent Care Tax Credit to help families
care for their children and older dependents such as a disabled
grandparent who may need additional support.
Preserves the Earned Income Tax Credit
to provide important tax relief for low-income Americans working to
build better lives for themselves.
Streamlines higher education benefits
to help families save for and better afford college tuition and other
education expenses.
Continues the deduction for charitable
contributions so people can continue to donate to their local
church, charity, or community organization.
Preserves the home mortgage interest
deduction for existing mortgages and maintains the home mortgage
interest deduction for newly purchased homes up to $500,000 – providing
tax relief to current and aspiring homeowners.
Continues to allow people to write off
the cost of state and local property taxes up to $10,000.
Retains popular retirement savings
options such as 401(k)s and Individual Retirement Accounts so
Americans can continue to save for their future.
Repeals the Alternative Minimum Tax
so millions of individuals and families will no longer have to worry
about calculating their taxes twice each year and pay the higher amount.
Provides immediate relief from the
Death Tax by doubling the exemption and repealing the Death Tax after
six years. Family-owned farms and businesses will no longer have
to worry about double or triple taxation from Washington when they pass
down their life’s work to the next generation.
For job
creators of all sizes, the Tax Cuts and Jobs Act:
Lowers the corporate tax rate to 20% –
down
from
35%,
which
today
is
the
highest
in
the
industrialized
world –
the largest reduction in the U.S. corporate tax rate in our nation’s
history.
Reduces the tax rate on the
hard-earned business income of Main Street job creators to no more than
25%– the lowest tax rate on small business income since World
War II.
Establishes strong safeguards to
distinguish between individual wage income and “pass-through” business
income so Main Street tax relief goes to the local job creators
it was designed to help most.
Allows businesses to immediately write
off the full cost of new equipment to improve operations and
enhance the skills of their workers – unleashing the growth of jobs,
productivity, and paychecks.
Protects the ability of small
businesses to write off the interest on loans that help these
Main Street entrepreneurs start or expand a business, hire workers, and
increase paychecks.
Retains the low-income housing tax
credit that encourages businesses to invest in affordable
housing so families, individuals, and seniors can find a safe and
comfortable place to call home.
Preserves the Research &
Development Tax Credit – encouraging our businesses and workers
to develop cutting-edge “Made in America” products and services.
Strengthens accountability rules for
tax-exempt organizations to ensure the churches, charities,
foundations, and other organizations receiving tax-exempt status are
focused on helping people and communities in need.
Modernizes our international tax system
so America’s global businesses will no longer be held back by an
outdated “worldwide” tax system that results in double taxation for
many of our nation’s job creators.
Makes it easier and far less costly
for American businesses to bring home foreign earnings to invest
in growing jobs and paychecks in our local communities.
Prevents American jobs, headquarters,
and research from moving overseas by eliminating incentives that
now reward companies for shifting jobs, profits, and manufacturing
plants abroad.
The House Ways and Means Committee
will mark up the Tax Cuts and Jobs Act on November 6, 2017.
The White House
Statement from the President on the Tax Cuts and Jobs Act
I applaud the House Ways and Means Committee for introducing the Tax
Cuts and Jobs Act, which is another important step toward providing
massive tax relief for the American people. My tax reform
priorities have been the same since day one: bringing tax cuts for
hardworking, middle-income Americans; eliminating unfair loopholes and
deductions; and slashing business taxes so employers can create jobs,
raise wages, and dominate their competition around the world. The
policies of my Administration have already helped to drive the stock
market to all-time highs and the unemployment rate to a 16-year
low. Economic confidence is skyrocketing and our GDP grew 3
percent yet again this quarter.
We are just getting started, and there is much work left to do.
The special interests will distort the facts, the lobbyists will try to
save their special deals, and some in the media will unfairly report on
our efforts. But my Administration will work tirelessly to make
good on our promise to the working people who built our Nation and
deliver historic tax cuts and reforms -- the rocket fuel our economy
needs to soar higher than ever before.
###
Committee for a Responsible Federal Budget
A Step Backwards for Fiscal
Responsibility
Today, the House Ways and Means
Committee unveiled the Chairman’s Mark of the “Tax Cuts and Jobs Act.”
The following is a statement from Maya MacGuineas, president of the
Committee for a Responsible Federal Budget:
While it is encouraging to see the House move forward on tax reform, it
seems each new vote and milestone is a step backwards for the cause of
fiscal responsibility.
The original House-passed budget proposed reconciliation instructions
for revenue-neutral tax reform along with $200 billion of spending
cuts. The final budget passed allowed instead for a $1.5 trillion
deficit increase. And now we have a tax plan that may be even worse.
Not only would today’s legislation cost more than $1.5 trillion over a
decade, but it includes a number of gimmicks, including allowing
certain provisions to expire, that could ultimately result in more than
$1.5 trillion of new deficits. The bill also continues to rely on
unrealistic economic growth assumptions to justify its cost.
Even a $1.5 trillion increase in the debt amounts to almost $12,000 per
household – a steep price passed on to our children.
Tax reform is an important national priority that can help grow the
economy if done right. We are pleased to see the House put forward a
number of serious pay-fors to help finance rate reductions. But given
the huge unpaid-for gap remaining, this plan does not constitute true
comprehensive, revenue-neutral, and pro-growth reform. It instead is a
bill of treats paid for by too many tricks that could harm the economy,
not help it – a scary prospect for our country’s future at a time when
we already face a dire fiscal state.
With debt higher than any time since just after World War II and
trillion-dollar annual deficits slated to return by 2022 under current
law, there is no justification to adding trillions more to the nation’s
credit card. No credible model shows that tax cuts will create enough
growth to fill in the funding gap, and increasing the debt can actually
slow economic growth, leaving us in worse shape than before.
We encourage members of Congress to focus on further base broadening,
new sources of revenue, spending cuts, or scaled-back rate reduction to
pay for this bill. The best and only real chance for tax reform to grow
the economy is if it is permanent and fully paid for.
###
Concord Coalition
Concord Coalition Says Tax Plan Is Fiscally Irresponsible
WASHINGTON -- The Concord Coalition warned that the tax plan released
today by the House Ways and Means Committee is fiscally irresponsible
and would create even higher federal deficits than are already
projected for the coming decade.
“True tax reform should aim to grow the economy without growing the
debt ” said Robert L. Bixby, Concord’s executive director. “This plan
would move U.S. fiscal policy in a dangerous direction, openly inviting
higher deficits in the face of unsustainable debt.”
“While some special provisions in the tax code are eliminated or
reduced to increase federal revenue, the proposed tax cuts are so deep
that they would cancel out that revenue gain and require additional
borrowing,” Bixby said.
The federal debt recently passed the $20 trillion mark, and the
Congressional Budget Office (CBO) projects that under current law the
government is on track to add more than $10 trillion to that in the
next 10 years. This version of the tax plan will add at least another
$1.5 trillion onto that projection.
Furthermore, as the details of the plan are analyzed it is likely that
some of the politically sensitive choices being made to limit the
impact on the deficit will be revisited.
“It is important that any changes made to this draft to accommodate
interest group concerns and increase potential support be paid for by
reducing tax cuts rather than increasing the number of budget
gimmicks,” Bixby said.
The proposed legislation is already using some well-worn timing
gimmicks, such as gradually phasing the cuts in to make their 10-year
costs appear smaller or prematurely sunsetting them. If the cuts with
sunset provisions are later renewed, the plan will likely add even more
to the deficit than the current $1.5 trillion price tag.
The proposal also does very little to simplify the tax code in a way
that would increase economic efficiency and support long-term economic
growth. In fact some provisions, like the new business pass-through
rate, would substantially increase the complexity of the code.
Congressional leaders and President Trump are pushing for quick
approval of tax legislation. But undue haste would be unfortunate,
particularly with such a massive and complex overhaul of the tax system
that has been worked out behind closed doors -- and without the benefit
of serious bipartisan discussion.
At a minimum, lawmakers should make sure they understand what they are
voting on and give the CBO time to provide careful estimates of the
fiscal and economic impacts that proposed measures would have.
Using some revenue-raisers to pass legislation that increases deficits
overall would represent a lost opportunity for real tax reform that
would boost economic growth and start reining in the federal debt.
A copy of this press release can be found
here.
The Concord Coalition is a
nonpartisan, grassroots organization dedicated to fiscal
responsibility. Since 1992, Concord has worked to educate the public
about the causes and consequences of the federal deficit and debt, and
to develop realistic solutions for sustainable budgets. For more fiscal
news and analysis, visit concordcoalition.org and follow us on Twitter:
@ConcordC
Democratic National Committee
5 Worst Parts Of The Newly-Revealed Republican Tax Plan
Today House Republicans released a tax bill that provides massive tax
cuts for the wealthy and big corporations while simultaneously cutting
the health care, education, and mortgage deductions middle-class
families rely on and blowing a big hole in the deficit. Here are just
some of the worst parts of the newly-revealed Republican tax plan:
Provides a windfall to huge
corporations by cutting the corporate tax rate from 35% to 20%.
Bloomberg: “House Republican leaders began rolling out a tax bill
Thursday that contains sweeping changes for business and individual tax
rates, including a measure to cut the corporate tax rate to 20 percent.”
Gives a massive handout to the wealthy
by repealing the estate tax and eliminating the alternative minimum tax.
Washington Post: “It would create giant new benefits for the wealthy by
cutting business taxes, eliminating the estate tax, and ending the
alternative minimum tax.”
New York Times: “The proposal will double the estate tax exemption to
roughly $11 million, from $5.49 million, meaning families can avoid
paying taxes on large inheritance. And it eventually repeals the estate
tax altogether, phasing it out entirely in six years.”
Repeals deductions that benefit
middle-class families.
Wall Street Journal: “For example, the proposal repeals an itemized
deduction for medical expenses, a crucial provision to households with
extraordinary health-care costs. It also repeals the tax credit for
adoption and the deduction for student-loan interest. The bill also
limits the home mortgage-interest deduction.”
Creates a Trump loophole by lowering rates on pass-through businesses
from 39.6% to 25%.
Vox: “It would also offer a new low tax rate for owners of
‘pass-through’ businesses like LLCs and partnerships, whose income from
their businesses is taxed as personal income. The bill in its current
form would almost certainly give disproportionate benefits to wealthy
Americans, who tend to benefit from corporate tax cuts more than
non-wealthy Americans and who could likely exploit the pass-through
rate by setting up dummy corporations.
Eliminates the $4,050 per child tax
exemption and calls for a $300 tax credit that’s only temporary.
Associated Press: “The child tax credit would be increased from $1,000
to $1,600, though the $4,050 per child exemption would be repealed.”
Wall Street Journal: “The House bill also creates a new $300 credit for
each person in a filer’s family who isn’t a child, including the
primary taxpayer and non-child dependents such as college students.
Those $300 credits expire after 2022.”
National Association of Manufacturers
by Michael Short, Senior Director,
Strategic Communications
NAM: Tax Plan Is A Grand Slam For Manufacturers And
U.S. Economy
Momentum Is On The
Side Of America’s Workers
Washington, D.C. –
National Association of Manufacturers (NAM) President and CEO Jay
Timmons released the following statement on the tax reform legislation
unveiled today by the U.S. House of Representatives:
“Today is a
tremendous day in America thanks to this grand slam for hardworking
manufacturers and the U.S. economy. The proposal is a guaranteed path
to surge investment, jobs and economic growth that will lead to better
lives for every American.
“The NAM’s recent
Manufacturers’ Outlook Survey of our 14,000 members—large and
small—indicated that real and meaningful tax reform will result in more
investment and job creation. Sixty-four percent said they will invest
in new equipment, 57 percent said they will hire more workers and 52
percent said they will increase pay and benefits. This plan is the real
and meaningful reform that they are looking for, and the change they
voted for almost one year ago.
“Above
all, manufacturers are cheering this bold proposal by Chairman Brady,
Speaker Ryan, Chairman Black and other House leaders because these tax
cuts will make a real and positive difference for middle class
Americans, creating more wealth for higher wages, to reduce the cost of
living and to increase savings for retirement and the future. These
outcomes are what these real reforms are all about—and why they’re
needed.
“This announcement builds on the momentum from last
month’s budget votes in the House and Senate. Manufacturers look
forward to continuing to work closely with the Ways and Means Committee
and House leadership to advance these reforms so that manufacturers and
manufacturing workers in the United States win against their global
competitors.”
-NAM-
U.S. Chamber of Commerce
U.S. Chamber Applauds House Tax Reform Draft, Acknowledges More
Work Remains to be Done
WASHINGTON, D.C. —
U.S. Chamber of Commerce Senior Vice President and Chief Policy Officer
Neil Bradley issued the following statement today on the tax reform
legislative draft unveiled in the House of Representatives:
“This bold tax reform bill is exactly what our nation needs to get
our economy growing faster. A lot of work remains to be done to get the
exact policy mix right and move from a legislative draft to an enacted
law. We share Chairman Brady’s commitment to permanent reform because
temporary tax relief simply will not produce the pro-growth environment
we all desire. The business community stands ready to be an active
partner with lawmakers over the coming weeks — and every step of the
way — as we push to complete a re-write of our outdated tax system.”
As evidence
of
its
commitment
and
determination, the U.S. Chamber on Tuesday
sent a letter
to all members of Congress signed by nearly 300 business groups and
state and local chambers of commerce saying, “Completing the task will
not be easy. We commit to working with you to achieve our shared goal
of comprehensive, pro-growth tax reform.” U.S. Chamber President and
CEO Tom Donohue carried
this
same
message to the White House this week.
Financial Accountability and Corporate
Transparency (FACT) Coalition
November 2, 2017
House Bill a Gift to Offshore Tax
Dodgers and Outsourcers
WASHINGTON, D.C. — The U.S.
House Ways and Means Committee unveiled legislation Thursday that would
overhaul the U.S. tax system. According to the Financial
Accountability and Corporate Transparency (FACT) Coalition, the bill
would reward corporations that have shifted profits to tax
havens. The proposal would also create new measures to tax future
profits booked offshore at either zero or ten percent, depending upon
how the income is classified. These low rates for offshore income
contrast with a higher rate – 20 percent for domestic businesses.
The Coalition is still reviewing the plan to evaluate the full impact
of the international tax provisions.
Clark Gascoigne, the deputy director of the FACT Coalition, issued the
following statement:
“This bill appears to be a gift to the multinational companies that
have dodged taxes for years by offshoring profits and jobs. It
rewards those corporations that have booked trillions of dollars
overseas with a special 12 percent tax rate on their past offshore
profits. Worse, the bill grants an even lower rate — a mere 5
percent rate — for the companies that have outsourced real investments
abroad. There is no economic justification for a lower rate on profits
already made.
“The most dangerous parts of the plan are how they treat offshore
profits moving forward. The proposal permanently gives multinational
corporations a tax rate that is, at most, half the rate for small and
domestic businesses. Many multinationals will be able to pay zero
percent on their profits booked offshore.
“The lower offshore rate will only incentivize large corporations to
book more and more profits offshore and outsource production and jobs
to tax haven countries like Switzerland and Ireland. These tax
giveaways hurt small businesses and middle-class taxpayers who will pay
in some combination of higher taxes, larger deficits, and cuts to
services they use.
“While we appreciate some of the base erosion measures in the bill,
they won’t fix the problem. In closing one offshore loophole, the bill
has opened up another, offsetting any potential benefits to stop the
gaming of the tax code. This legislation is simply out of step
with the American people, who overwhelmingly believe that multinational
corporations should pay the same rate, if not more, on the profits they
book overseas as they do on their profits earned at home.”
AFL-CIO
Republican
Tax
Bill Nothing But Corporate Giveaways