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National Govt & Politics
Jumping into the fine print of the Senate GOP tax reform bill
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Jumping into the fine print of the Senate GOP tax reform bill

Jumping into the fine print of the Senate GOP tax reform bill
Photo Credit: Jamie Dupree

Jumping into the fine print of the Senate GOP tax reform bill

As Republicans in the Congress press ahead with their legislative plans for major reform of the federal tax code, GOP leaders hope to hold a vote in the House late next week, while a key Senate committee will begin work on Monday on that chamber's version of a sweeping tax reform measure.

Like the House bill, there are some interesting items in the fine print that may not grab the headlines in your local newspaper.

Here's a few to chew on:

1. No more tax breaks for those who bicycle to work. Most people probably have no idea that you could ride your bicycle to work, and be eligible for a "qualified bicycle commuting reimbursement" of up to $20 per month. This was started because there were federal tax breaks for people who took mass transit to work, where employers could give money to their workers to help pay for their subway or train tickets, and that cash would not be considered as income. How much money will getting rid of the bicycle commuting reimbursement save Uncle Sam? The estimate that accompanies the new Senate tax reform bill is so small that it is qualified as being "less than $50 million" over ten years.

2. No more tax deductions for war profits. I learn something every day that I report from Capitol Hill. I did not recall that under current law, you are allowed to deduct: "State, local real and foreign property taxes; State and local personal property taxes; State, local and foreign income, war profits , and excess profits taxes." The Senate GOP tax reform plan specifically says no more deduction for war profits in the future - and I guess I didn't read the House plan closely enough, because the GOP tax reform bill would also do away with that deduction in the future. There is a reason that the fine print is important.

3. Changes dealing with your home. Under current law, you can deduct the interest on up to $100,000 of a qualifying home equity loan, but the House bill moved to end that write-off, and the Senate bill does the same. Also, the Senate takes a step in the direction of the House bill by extending the amount of time that you need to own (and live in) your principal residence, before you can sell it, and take advantage of the rules on tax-free capital gains ($250,000 for an individual, $500,000 for a couple). The Senate extends that time frame to five years, up from the current two.

4. A new category of income for tax reporting purposes. "The proposal creates a category of income defined as "passenger cruise gross income," it states in the explanation of the Senate tax reform bill. Think about this for a second. If you get on a cruise ship somewhere in Florida, and then you go around the Caribbean for a week, and then return to the U.S., what happens with all of the money that you and other passengers spend on that ship? Does it get taxed? Or is it just sort of in limbo, outside the reach of U.S. taxation? It's an interesting little thing to think about. It's estimated this provision would bring in $700 million over 10 years, so it's not a big moneymaker for Uncle Sam.

5. Tax simplification for business - not so much. There is a lot of talk about how this plan would simplify the tax code, and while that would be true in some respects for individuals (if you don't make enough money, and don't have investments, or large deductions to itemize), that's not true on the business side of the tax equation. Reading through the explanation of the Senate bill makes that brutally obvious. "The proposal addresses recurring definitional and methodological issues that have arisen in controversies in transfers of intangible property for purposes of sections 367(d) and 482, both of which use the statutory definition of intangible property in section 936(h)(3)(B)," it reads in one part. One thing is for sure, tax accountants and tax lawyers will still be a good place to make money in the future, as this Senate bill won't reform them out of business.

6. Wait, where is the bill? This is one interesting part about the Senate tax reform proposal. There really isn't a bill - there is a description and explanation of the GOP proposal, but no actual bill language. Back during the development of the Obama health law, Democrats did the same, as the chairman of the Senate Finance Committee steered that plan through by dealing in 'plain English' first, and then bill language later. But to this reporter, it always seems odd that the committee will release the details of a bill on miscellaneous tariffs, but not bill language on a major tax bill, where the technical language is so very important, as we saw in the House. Instead of the bill text, you can read the explanation of the Senate bill, which is still 253 pages in all.

Happy reading. The Senate Finance Committee markup starts on Monday.

The House is expected to vote on tax reform late next week; a Senate vote would come after Thanksgiving.

 

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The Latest Headlines You Need To Know

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  • Prosecutors in Illinois have filed 10 counts of aggravated criminal sexual abuse against R&B musician R. Kelly, Cook County State’s Attorney Kim Foxx said Friday at a news conference. Foxx said the charges were related to incidents alleged to have occurred between 1998 and 2010 with four separate victims. >> Read more trending news Update 9:20 p.m. EST Feb. 22: R. Kelly turned himself in to Chicago police after being charged with 10 counts of aggravated sexual abuse. The 52-year-old singer, whose real name is Robert Kelly, arrived at the precinct in a van about 8:15 p.m. Friday. If taken into custody, he is expected to be held overnight and appear Saturday in bond court. Kelly’s attorney Steve Greenberg said he maintains his innocence and looks forward to being acquitted at trial. Update 6:30 p.m. EST Feb. 22: R. Kelly’s attorney said the singer is “shell-shocked” by the aggravated sexual abuse indictment against him and plans to turn himself in to authorities Friday night. Steve Greenberg told The Associated Press that his client is “extraordinarily disappointed and depressed” by the 10 counts Chicago prosecutors filed against him. Update 3:15 p.m. EST Feb. 22: Authorities held a brief news conference Friday to announce the charges against Kelly. Foxx said the charges brought against Kelly involve four victims, three of which were under the age of 17 at the time of the alleged sexual abuse. The alleged sexual abuse took place between 1998 and 2010, she said. The charges are class 2 felonies which carry maximum sentences of seven years per charge, Foxx said. She added that they were “also probationable.” “We anticipate that Mr. Kelly will appear in bond court tomorrow afternoon,” Foxx said. Update 2:50 p.m. EST Feb. 22: The Chicago Tribune reported that the charges against Kelly involve four victims, at least three of which are underage. The incidents were alleged to have occurred between 1998 and 2010 with minors between the ages of 13 and 16, according to the Tribune. A judge on Friday approved of a no-bail arrest warrant for Kelly, the Sun-Times reported. Authorities are expected to provide more information on the case at a news conference Friday afternoon. Original report: Tandra Simonton, spokeswoman for the Cook County State's Attorney's Office, confirmed to The Associated Press that charges had been filed against the 52-year-old Grammy winner but declined to say the specific number. Media reports said there were 10 counts, all involving underage victims. >> New sex tape allegedly shows R. Kelly having sex with underage girl, according to reports The charges are felonies that carry maximum sentences of seven years each, if Kelly is convicted, WGN-TV reported. Kelly, one of the top-selling recording artists of all time, has several times over the years been accused of sexual misconduct, allegations that he’s consistently denied. Jurors acquitted Kelly of child pornography charges at a 2008 trial. Those charges stemmed from a video prosecutors alleged showed of Kelly having sex with a girl as young as 13. >> Report: R. Kelly being investigated by Atlanta-area DA after docuseries abuse allegations The latest charges were filed nearly two weeks after a man gave authorities new footage that purportedly showed Kelly engaging in sexual acts with an underage girl. The man's attorney, Michael Avenatti, told CNN last week that the man was a whistleblower. Avenatti said his client “worked for and has known R. Kelly for decades and he met the girl on a number of occasions.” On Friday, Avenatti seemed to announce the charges against Kelly with a two word tweet: “It’s over.” >> Who is R. Kelly? 7 things to know  “After 25 years of serial sexual abuse and assault of underage girls, the day of reckoning for R. Kelly has arrived,” he wrote in a subsequent tweet. Avenatti said he will provide more information about the case at a press conference Friday afternoon. Cook County State's Attorney Kim Foxx is also expected to hold a news conference Friday. The Associated Press contributed to this report. Check back for updates to this developing story.
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  • An Alabama woman has been charged with multiple burglaries that she is accused of committing while the homeowners were at the funerals of loved ones. Jennifer Lynn Azizian, of Madison, is charged with four counts of felony burglary out of Priceville and a single count of misdemeanor burglary by the Morgan County Sheriff’s Office.  Sheriff’s Office and Priceville police officials allege Azizian found her targets by reading local obituaries. She then Googled addresses of those listed as survivors and broke into their homes while they were attending the funerals, investigators said.  “She would then go to the address during the time of the funeral and forcibly enter the home to locate prescription medication,” Sheriff’s Office officials said in a news release. “As people were laying their loved ones to rest, little did they know that someone was adding to their grief by breaking into their homes,” Priceville police officials said in a statement obtained by AL.com. “It was clear that the suspect had been researching obituaries for some time.” >> Read more trending news Princeville police officials said they had video footage of the burglar and her vehicle but did not know who she was, AL.com said. That changed Feb. 20, when Morgan County deputies received a call about a burglary in progress in neighboring Hartselle.  The deputies performed a traffic stop on Azizian, who was identified by the homeowner, Sheriff’s Office officials said.  Azizian allegedly gave investigators a statement admitting to the burglaries. She was booked into the Morgan County Jail with bond set at $60,300. She is no longer listed as an inmate, suggesting she has been released. Geoff Halbrooks, a longtime employee of Peck Funeral Home in Hartselle, told WHNT News 19 in Huntsville that social media is making crimes like those Azizian is accused of easier to commit. “(They) look on social media and look at their newspapers and just find those families,” Halbrooks said. “There are ways to do that now without a funeral home or anyone else giving their specific address.” He urged grieving loved ones to have someone they trust house-sit while they are away at funerals.  “There are friends and extended family members that would be glad to stay at their home to watch over their personal things while they're handling the affairs of the funeral,” Halbrooks told the news station. 
  • New England Patriots owner Robert Kraft has been charged in connection with a prostitution sting in Florida, WFXT reported. >> Read more trending news The charge follows a series of raids involving at least eight massage parlors on the east coast of Florida. In a statement, officials with the NFL said the league was “aware of the ongoing law enforcement matter and will continue to monitor developments,” according to NFL.com. On Tuesday, police announced the arrest of two women on prostitution, racketeering and money laundering charges and said nearly 200 others would be arrested on solicitation charges. Police in Vero Beach announced the arrest of eight other suspects linked to three massage parlors, plus nearly 200 men who solicited prostitution. >> See the latest on Boston25News.com Police confirmed Friday that Kraft was involved in the bust. Authorities said surveillance camera footage showed him inside one of the spas. “He was a regular,” police said. Authorities in Jupiter said they filed a complaint against Kraft, who has been charged with soliciting another to commit prostitution. The charge is a misdemeanor. Kraft, 77, denied the veracity of the charges in a statement released Friday. Police said the state attorney in Palm Beach County is handling the case. >> Could Robert Kraft face sanctions from NFL for prostitution charges? Kraft has a long history in Foxborough and New England starting back in 1965, when he graduated from Harvard Business School. Kraft took ownership of the Patriots in 1994 after being a season ticket owner for 23 years. The day he bought the team, he said his objective was to bring a championship to New England.  In the five years before he bought the team, the Patriots had won fewer than 25 percent of their games. In February 2002, the Patriots won their first Super Bowl. >> Photos: Patriots owner Robert Kraft through the years Later that year, Gillette Stadium opened to replace the Foxborough stadium. Gillette was privately funded by Kraft and remains one of the few sports stadiums in the country that didn't rely on public money. One year after buying the Patriots, Kraft became one of the founders of Major League Soccer when he established the New England Revolution.  >> Who is Patriots owner Robert Kraft? In 1998, the Kraft Group was founded, a group of companies including those in the paper and packaging, sports and entertainment, construction and real estate and philanthropy industries. According to the company’s website, they employ nearly 10,000 people worldwide.  Kraft lives in Brookline, Massachusetts, and also owns a home in Palm Beach, Florida. The Cox Media Group National Content Desk contributed to this report.

Washington Insider

  • Democrats in the House of Representatives unveiled their one page plan on Friday to overturn President Donald Trump's bid to funnel more money to a border wall by declaring a national emergency, as Speaker Nancy Pelosi told reporters said the House would vote next Tuesday to block the President's executive actions on funding for the wall. 'Members of Congress all swear an oath to support and defend the Constitution,' the Speaker said. 'The President’s decision to go outside the bounds of the law to try to get what he failed to achieve in the constitutional legislative process violates the Constitution and must be terminated,' Pelosi wrote earlier this week in a letter to fellow Democrats. Democrats said they already have more than a majority of members signed on to the one page resolution to reject the Trump national emergency. 'We hope that enough of our normal Republican enablers will join us to stand up for the Constitution,' said Rep. Lloyd Doggett (D-TX). 'If not, we’re ready to turn to the courthouse.' As of Friday, only one Republican in the House had signed on to the plan to reject the President’s national emergency, Rep. Justin Amash (R-MI). “Trump’s absurd declaration of a “national emergency” undercuts the Constitution,” said Sen. Jeff Merkley (D-OR), as approval in the House would send the plan to the Senate. Under special rules governing this process, GOP leaders would not be able to ignore the House action, as a vote must take place on the resolution. But even if it passes in the Senate, a veto is likely by President Trump, and at this point - it seems unlikely that Democrats could muster enough GOP votes for a two-thirds supermajority to override a veto.