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Play-by-play breakdown of The Donald's historic tax cut promise
The Donald (center) with Vice President Pence (L) and Speaker Ryan (R)— by Joseph Earnest
by Joseph Earnest December 30, 2017
Newscast Media WASHINGTON—During his presidential campaign, Donald Trump promised not only to give Americans huge tax breaks, but also repeal and replace Obamacare.
It appears the Donald is as good as his word. He called it a Christmas gift to the American worker. On Wednesday, December 20, 2017, the Republican majority in the House and Senate delivered on Trump's promise, to the amazement of their liberal opponents. The vote was 224-201 and came hours after the Senate's early morning passage along party-lines.
Here's the breakdown:
TAX CUTS FOR AMERICAN FAMILIES: The Tax Cuts Act means less money taken out of Americans’ paychecks.
· The Tax Cuts Act provides $5.5 trillion in tax cuts, $3.2 trillion, or nearly 60 percent, of which go to families.
· The Tax Cuts Act nearly doubles the standard deduction.
o For individuals, the standard deduction will be increased from $6,500 to $12,000.
o For single parents, the standard deduction will be increased from $9,550 to $18,000.
o For married couples, the standard deduction will be increased from $13,000 to $24,000.
· The vast majority of American families will now be able to file their taxes on a single page because they lower taxes by claiming the standard deduction.
· American families will see their Child Tax Credit doubled to $2,000 per child under age 17.
o Families will receive a new $500 tax credit for dependents age 17 or older.
o The full Child Tax Credit will now be available for families with incomes of up to $200,000 for single households and incomes of up to $400,000 for married households.
o Lower and Middle-Income families will benefit from a 40 percent increase in the refundable portion of the Child Tax Credit.
· The Tax Cuts Act will repeal Obamacare’s burdensome individual mandate.
o The repeal of Obamacare’s individual mandate will provide relief to households with income below $50,000, which made up nearly 80 percent of the households that paid the mandate penalty in 2016.
· The vast majority of family farms and businesses will be exempt from the estate tax.
· Investments in education will be protected under the Tax Cuts Act.
o Families will now be able to use up to $10,000 from 529 college savings accounts on primary and secondary education.
o Tax-free stipends for graduate students will be maintained.
o Student loan interest will continue to be deductible.
· The Tax Cuts Act preserves tax benefits important to American families.
o The Earned Income Tax Credit for low-income workers will be preserved.
o The Child and Dependent Care Tax Credit will be preserved.
o The Adoption Expense Tax Credit will be preserved.
o Retirement savings tax benefits will be preserved.
PRO-GROWTH REFORM FOR AMERICAN BUSINESSES: The Tax Cuts Act enacts pro-growth reform, putting American businesses on a level playing field with foreign competitors.
· America’s corporate tax rate will be lowered from the highest in the developed world to below the Organisation of Economic Co-operation and Development (OECD) average.
o The corporate tax rate will be cut from 35 percent to 21 percent, below the OECD average of 22.5 percent.
· Businesses will receive $1.8 trillion in total tax cuts, spurring economic growth and generating more revenue.
o The Council of Economic Advisors estimates that these tax cuts will grow the economy an additional 3 percent.
o This economic growth will generate even greater economic opportunity for all Americans.
· The Tax Cuts Act provides $415 billion in additional tax cuts for S corporations, partnerships, and sole proprietors.
o More than 90 percent of all American businesses are organized as one of these “pass through” entities.
o Owners of these businesses will be able to deduct 20 percent of their qualified business income.
· Businesses will be able to deduct 100 percent of the cost of their capital investments for the next five years.
· The Tax Cuts Act will get rid of our outdated worldwide taxation system, which penalizes companies headquartered in the United States when they bring foreign profits back home.
o Companies will be able to bring back future profits without paying additional taxes.
· A one-time tax will be imposed on corporate earnings stashed overseas, ending the incentive for companies to keep their profits outside of the U.S.
o A one-time tax of 15.5 percent on cash and cash equivalents will be imposed, as well as a one-time 8 percent tax on illiquid assets.
ELIMINATING SPECIAL INTEREST TAX BREAKS: The Tax Cuts Act will eliminate dozens of special interest tax breaks and loopholes.
· The Tax Cuts Act will raise $4 trillion in revenue by getting rid of dozens of special interest tax breaks and closing loopholes for corporations and wealthy individuals.
o The revenue generated by eliminating these tax breaks and loopholes will be used to help offset the tax cuts for American workers, families, and businesses.
· Numerous tax breaks and loopholes exploited by special interests will be eliminated.
o A 20 percent excise tax will be imposed on stock compensation when a company uses corporate inversion to avoid U.S. taxes.
o The deduction for local lobbying expenses will be eliminated.
o The loophole used to deduct executive compensation over $1 million will be eliminated.
o A 21 percent excise tax will be imposed on compensation over $1 million paid to executives at tax-exempt organizations.
o Members of Congress will no longer be able to deduct their living expenses. Add Comments >>
Speaker Paul Ryan celebrates largest tax cut in recent memory
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