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National Govt & Politics
On the verge of a big legislative victory, GOP unveils final tax reform details

On the verge of a big legislative victory, GOP unveils final tax reform details

On the verge of a big legislative victory, GOP unveils final tax reform details
Photo Credit: Jamie Dupree

On the verge of a big legislative victory, GOP unveils final tax reform details

Republicans on Friday evening unveiled the details of a final tax reform compromise, as the drive for approval of a sweeping package of GOP tax reforms gained new momentum, with two key Senators announcing their support for the plan, as party leaders planned final votes in the House and Senate for next week, on the verge of a major political victory.

First, here are the links to the important documents:

+ This is the text of the bill, along with some explanation of the provisions.

+ This second document also offers more details on what was agreed to in the final conference report.

Now, let's see what we find:


10:10 pm - Since this is a Republican bill, we will give the Speaker of the House the last word on this debate, with this tweet. A vote is expected in the House on tax reform on Tuesday.

9:55 pm - Sen. Marco Rubio (R-FL) had threatened to vote against the tax reform bill, but won a late change in the details on the Child Tax Credit. Now he's more than ready to vote for the plan next week.

9:55 pm - Sen. Marco Rubio (R-FL) had threatened to vote against the tax reform bill, but won a late change in the details on the Child Tax Credit. Now he's more than ready to vote for the plan next week.

9:35 pm - If you want some charts, it's your lucky day.

9:25 pm - One interesting change in current law comes in the education arena, where the GOP tax reform bill will allow families to save money in "529" savings accounts, and use up to $10,000 of that for K-12 expenses - which could include costs for private school tuition and homeschooling.

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9:15 pm - Let's remember one thing - this tax reform bill is going to the biggest achievement by far for President Trump in 2017, and same for the Congress. Most of the Trump legislative agenda has gone nowhere this year, so next week will be a big celebration for the GOP.

9:05 pm - As of this moment, the President has not tweeted specifically about the final agreement on the tax bill. The White House did put out this statement.

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8:55 pm - The links are up above, are you going to read the bill? Do you think your member of Congress will read the bill? Honestly, the demand to 'read the bill' was always somewhat of an empty argument, because no sane person can understand a complex piece of legislation just by reading the legislative language. But if you can't sleep late tonight, you may as well give it a try, right?

8:45 pm - Another side of the GOP is heard from, as Rep. Darrell Issa (R-CA) says he will vote against the final tax bill, not pleased with the $10,000 limit on itemized deductions for state and local sales, income and property taxes.

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8:35 pm - Not all the provisions in this bill are about taxes, as the final tax reform bill also includes a provision that opens up part of the Alaska National Wildlife Reserve (ANWR) to new oil and gas exploration.

8:25 pm - On the business side, the corporate tax rate will drop from 35% to 21%. Originally, the House - and the President - wanted a 20% rate, but the pressure to pay for other tax provisions brought that back just a little.

8:15 pm - Teachers lost, then won in the tax bill fight. The House tried to get rid of the deduction that teachers could take for buying supplies for their classrooms. The Senate bill doubled the deduction, up to $500. The Senate won this fight, and teachers won overall.

8:05 pm - The final tax deal also gets rid of a deduction that was used by people buying season tickets to college sporting events, which allowed them to make a charitable contribution to the school, and deduct that as part of the deal for a seat license. No more. That will be taken out of the federal code.

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7:55 pm - Another interesting item from the House bill, which was not included in the final tax reform deal, is on a provision that would basically allow churches to endorse political candidates, and work for them from the pulpit. This was known as repeal of the "Johnson Amendment" - it had a lot of GOP support, but the Senate Parliamentarian ruled that the plan ran afoul of the strict rules under budget reconciliation in the Senate.

7:45 pm - A House effort to stop pro sports stadiums from using tax-exempt bonds for construction is NOT in the final tax bill. That had been pushed by a number of lawmakers, who argued that even though it only saved $4 billion over 10 years, it was still an important step to take. But it didn't make the cut.

7:35 pm - No deduction allowed in the future for secret legal settlements related to sexual harassment or sexual abuse. So, if there is a nondisclosure agreement, that doesn't qualify.

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7:30 pm - Bicycle commuters get a flat tire in the final tax reform bill, as a $20 per month write off that was specially available for bicycle commuters is being erased from the federal tax code.

7:25 pm - The Alternative Minimum Tax lives on - for individuals - in the final tax reform agreement. The corporate version of the AMT is phased out, but the House-Senate agreement still has the AMT for regular taxpayers, though the "phaseout thresholds are increased to $1,000,000 for married taxpayers filing a joint return, and $500,000 for all other taxpayers."

7:15 pm - The final tax deal does not include provisions that some lawmakers felt would penalize graduate students, as provisions approved by the House which would end the tax exclusion for the graduate tuition waiver and employer assisted tuition benefits - those were taken out of the final version of the bill. "Students pursuing a higher education are working to better themselves," said Rep. Mike Turner (R-OH), who had pushed to remove those provisions, adding "this tax package encourages people to pursue the American dream."

7:10 pm - Despite a lot of talk about ending federal estate (inheritance) taxes, the final agreement does not go that far, instead doubling the exemption.

7:00 pm - The final tax deal does not change an important item in determining if you can exclude gains from the sale of a principal residence. The House wanted to extend the length of time you lived in that home from two to five years, but that provision was dropped in the tax reform agreement, probably much to the relief of the nation's realtors.

6:55 pm - As one might expect, the final tax reform deal gets a thumbs-up from the Speaker of the House, Paul Ryan. "This is what the American people have been waiting for: more jobs, fairer taxes, and bigger paychecks," Ryan said in a written statement.

6:50 pm - Instead of ending the medical expenses deduction - as the House voted to do - the final deal would allow taxpayers to deduct medical expenses if they run over 7.5% of income, instead of the current 10% figure. But this will apply for only two years, and the deduction would cease to exist at that point.

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6:45 pm - My colleagues are noticing a pattern that I saw as well, that the Senate seems to have prevailed on a number of issues in these negotiations.

6:40 pm - The final GOP bill will do away with the individual mandate tax penalty under the Obama health law - but not until 2019.

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6:35 pm - No surprise - Democrats don't like the final deal. House Democratic Leader Nancy Pelosi: "“With each version, the GOP tax scam becomes an even more cowardly, outrageous, and brazen theft from middle class families to corporations and the wealthiest one percent."

6:30 pm - Divorce tax law will be a little different, for the person who pays the alimony.

6:25 pm - The House Rules Committee will meet on Monday to set the rules for floor debate in the House on the tax reform bill. It looks like the vote will be on Tuesday.


6:20 pm - That deal on state and local taxes is not enough for some Republicans who voted against the original plan, as their districts are home to many people paying much more than $10,000 a year in those taxes. Rep. Peter King (R-NY) quickly made clear, he will be voting against the deal.

6:15 pm - The final deal on state and local tax deductions will allow taxpayer who itemize to deduct up to a total of $10,000. You can reach that level through any combination of local sales and/or income taxes, and property taxes.

c9f363e5-975b-490e-9fb0-851508bbc08d{ "/Pub/p8/CmgSharedContent/2017/12/15/Images/WPIMAGE_cmgwsbradiojamiedupree_tax227_14833.jpg?uuid=1vWTIDTOEemxKaMrYufZxg", "", "8e9a279e063b4e2293b44329ae0f1b52" "image" "" }

6:10 pm - On home mortgage interest, the final plan allows taxpayers to deduct that interest on a mortgage up to $750,000, down from $1 million under current law. All existing mortgages would be grandfathered. The plan also ends a write off for interest on a home equity loan.

6:05 pm - The Senate won the fight on the standard deduction, which will be increased to $12,000 for a single taxpayer, $18,000 for a head of household, and $24,000 for a married couple filing jointly. It would then be indexed to the "chained-CPI-U," which means it would then grow at a level that's less than inflation.

6:00 pm - Here is the tax bracket graphic for married couples. Note the highest tax bracket. Instead of simply doubling the amount of money in the top bracket for a single, which is $500,000, the plan has the highest rate for a couple who makes $600,000 a year. Current law sets that highest rate at around $418,000 and $470,000.

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5:55 pm - For many people, the first question to answer is what income tax rate will they pay under the new system. This is the graphic for single taxpayers.

c9f363e5-975b-490e-9fb0-851508bbc08d{ "/Pub/p8/CmgSharedContent/2017/12/15/Images/WPIMAGE_cmgwsbradiojamiedupree_tax225_14826.jpg?uuid=1eY05DTOEemxKaMrYufZxg", "", "2e67042bfd0d438dba1502945d8e08ab" "image" "" }

5:50 pm - Speaking to reporters, Rep. Kevin Brady (R-TX), the Chairman of the House Ways and Means Committee won't say exactly when the final vote will be in the House, but he's confident of victory. "Lots of momentum."

5:45 pm - The first thing to note is on the very first page, talking about individual income tax rates. The lower rates are not permanent. They would expire at the end of 2025 - so they last for eight of the ten years in this bill.


Earlier today - Votes fell into line in the Senate. "This bill is far from perfect," said Sen. Bob Corker (R-TN), who voted against the original Senate plan. "But after great thought and consideration, I believe that this once-in-a-generation opportunity...is one we should not miss."

Corker's announcement came soon after Sen. Marco Rubio (R-FL) signaled his support, after a late change to the bill's details on a child tax credit provision, all but insuring that the plan would make it through the Senate.

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Washington Insider

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