On Tuesday, the Senate Finance Committee released the most updated version of their GOP tax plan. Critics of these proposed tax reforms feel that many of the terms appeal to the special interests of the wealthy and big industry. It also has some questionable conditions regarding sexual predators and unborn children. But let’s start with some of the ‘positives’ from this long-awaited tax plan and work ourselves down into the abyss of lobbied efforts that has so many up in arms.
This condition will increase the child tax credit from its current amount of $1,000 to $2,000. The amount was originally proposed to be $1,650, but the Senate decided to round up and kept it at a solid $2k for the upcoming year. Some key senators pushed for this expansion and even first daughter, Ivanka Trump, voiced the condition as one of the most imperative tax reforms for the American people. Tim Scott representing South Carolina helped file the amendment and said that this reform:
would help hardworking American families…As the child of a single mother, I truly can’t overstate how important these dollars will be for parents across the country, be it to help buy school supplies, a new pair of sneakers or just have a night out as a family. I want to thank my colleagues for their important work on this issue.
Up until now, many court fees and payouts from sexual harassment settlements could be written off as business expenses. This modification follows the harsh accusation that current tax codes provide protection for sexual predators. Now the terms are clear as day stating:
no deduction is allowed for any settlement, payout, or attorney fees related to sexual harassment or sexual abuse if such payments are subject to a nondisclosure agreement.
After the House removed a $250 deduction for teachers, the academic community was not happy. Now the Senate has brought it back and increased the amount to $500 that teachers can write off for classroom expenses.
Initially, the Senate wanted to tax stock options starting from when startups were vested rather than when the stakes were sold. As you can imagine, venture capitalists and tech moguls from across the nation fought against this. The committee drew back the proposal and confirmed it would not change anything in its regard.
These revisions decrease a tax on barrels of brewed or imported beer. It also expands its tax credit for all entities of wine and sparkling wine production. The way in which suppliers deduct fermenting beer, wine and spirits have also been modified. Taxes are also lower for specific kind of drinks such as mead.
Citrus plant farmers can now receive deductions for replanting trees that were lost, damaged or died. Until now, citrus growers were not granted these tax breaks.
The Tax Policy Center summarizes as such: ” We find they would reduce federal revenue by $2.4 trillion over ten years and $3.2 trillion over the second decade (not including any dynamic feedback). Including economic feedback, revenue would fall by between $2.4 trillion and $2.5 trillion over the first ten years and by about $3.4 trillion over the second decade. In 2018, all income groups would see their average taxes fall, but some taxpayers in each group would face tax increases. Those with the very highest incomes would receive the biggest tax cuts. The tax cuts overall are smaller as a percentage of income in 2027, and taxpayers in the 80th to 95th income percentiles would, on average, experience a tax increase.
The Urban-Brookings Tax Policy Center found that 80 percent of the tax benefits would accrue to those in the top 1 percent. Households making more than about $900,000 a year would see their taxes drop by more than $200,000 on average while the majority of households that made between $150,000 and $300,000 would see a tax increase.
Private jet owners who make payments to aircraft management firms are now exempt from certain transportation taxes. This will also lower the expenses of firms that have to manage, maintain, store and operate the aircrafts.
BUT it creates new tax savings accounts (529s) for Foetus.
The Senate has now defined the meaning of an unborn child and claims that because they are technically alive, guardians of the fetus can open college savings accounts, otherwise known as 529 accounts, in their name. This coincides with the consensus established in the House of Representatives. Guardians can open 529 accounts in their names before the child’s birth and change the beneficiaries at any time with no penalties. Anti-abortion groups love this policy while opponents feel that this is another attempt to make recriminalize abortions and may cause abortion to become prohibited. Their definition of an unborn child is as follows:
an unborn child means a child in utero, and the term child in utero means a member of the species homo sapiens, at any stage of development, who is carried in the womb.
NARAL Pro-Choice America, a left-leaning pro-choice group, released a statement Wednesday saying this new provision is dangerous.
“The GOP’s relentless obsession with advancing its dangerous anti-choice ideology knows no boundaries and no common sense. Inserting ‘personhood’ language into their tax bill is just the latest example of how they’re trying to turn back the clock on this country.”
If the individual tax cuts in the bill expire as planned with this bill, the committee predicts that taxpayers earning $75,000 or less would see, as a group, large tax increases in 2027.Those tax increases would be relative to current law and the upcoming bill. In other words, those taxpayers would be worse off in 2027 than they would have been if the bill had not become law, and remained as they are now.
The joint committee’s analysis showed that taxpayers earning less than $40,000 would see their tax bills go up in the second half of the next decade.
How do you guys feel about the proposed tax plan? Do you approve of its terms or are you disappointed with the revisions thus far? We would love to hear what you think on the matter!
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