Quote:While many of her colleagues are floating ways to make the tax cut bigger, Collins offered three ideas to reporters on Monday about how to make it smaller, in order to make room for it to get bigger in other areas. The main political and substantive problem with the Republican tax cut is most of its benefits are reserved for very wealthy people or for businesses, which are mostly owned by very wealthy people. And because the tax cut is limited to a fixed size, if you want to give more tax relief to middle-income families, you have to give less to very wealthy people and to businesses. This should be obvious. But I believe Collins is the first Republican senator to have said this very obvious thing out loud in clear terms.

Quote:A top Republican fundraiser in the state of New York has quit his position in the state’s Republican Party because of the GOP tax reform bill, according to a new report. Steve Louro, who has served as a regional finance director for New York’s Republican Party, quit the position on Tuesday, according to The New York Times. Louro blasted the GOP bill in an interview with The Times, calling it ”a disgrace.” “The bill that’s going to get passed is not going to take care of the American people,” Louro told The Times. “It’s a disgrace. It’s going to hurt a lot of middle-class Republicans," he added. The Times also reports that Louro used an expletive to describe how Republicans messed up after they “took control of the government against all odds.” Louro had previously hosted a fundraiser for then-candidate Donald Trump and has previously been a prominent supporter of Republican candidates. Rep. Peter King (R-N.Y.) told The Times he understood Louro’s concerns with the bill, saying Republicans “can’t afford to be losing people like Steve Louro.”

Quote:Senate Republicans, led by Finance Committee Chair Orrin Hatch, unveiled major changes to their tax reform bill Wednesday night that transform the bill into a trade: Corporations get permanently lower taxes, paid for by tax increases and health care cuts for individuals.

Under the proposed changes, the bill’s tax cuts and benefits for individual Americans would almost all sunset by December 31, 2025. That includes the increased child tax credit, the doubled standard deduction, the estate tax cut, repeal of the alternative minimum tax, and even the tax break for pass-through business income. Some revenue raisers on the individual side, like abolition of deductions for state and local taxes and the elimination of personal exemptions, would expire at the end of that year too.

But other changes are permanent. The bill permanently eliminates the individual mandate that penalizes people for not having health insurance, raising $338 billion over 10 years by causing about 13 million fewer people,according to the Congressional Budget Office, to enroll in Medicaid or private insurance. The bill also adjusts tax bracket thresholds using a slower-growing inflation measure (known as chained CPI) than the one used currently. That amounts to an across-the-board tax increase for individuals, one that grows larger and larger over time. And those changes enable the bill to pay for a permanent cut in the corporate tax rate, from 35 to 20 percent.

Quote:Billionaire entrepreneur and potential presidential candidate Mark Cuban said on Wednesday that a cut in the U.S. corporate tax rate would have little to no effect on his investment decisions. Bills before both the U.S. Senate and the House of Representatives would cut the corporate rate from the current 35 percent to 20 percent. President Donald Trump and other supporters of the tax cut bills say reducing corporate and other taxes would boost the U.S. economy by freeing up capital that would be invested in job-creating industries. But Cuban said the tax rate had zero impact on decisions whether to invest in small businesses, as he does through the reality show “Shark Tank,” and almost no effect on decisions for his own lineup of tech and entertainment companies. “Competition drives what I do in my businesses a whole lot more than tax rates,” Cuban told a Reuters Newsmaker forum entitled “The Trump Budget Debate” and moderated by Reuters Editor-at-Large Harry Evans.

Quote:
Burham: Our dynamic analysis shows that over 10 years, it increases federal debt somewhere between $2 trillion and $2.1 trillion. By 2040, debt will increase from somewhere between $6.3 trillion and $6.8 trillion more than it would under current policy. Overall, both tax bills are a tax cut — taking revenue out of the system. Knowledge@Wharton: You have just described debt. What would happen to economic growth? Burham: The tricky thing about debt is that as you increase debt in the long run, it actually dampens economic growth, and that’s because some of the savings that people have don’t go into private investment – they go into paying for the debt. As a result, after 10 years, the tax cut and jobs act will increase GDP somewhere between 0.33% and 0.83% relative to where it would have been in 2027. However, this boost fades over time, mostly due to the rising debt. And by 2040, GDP could even fall below, in some scenarios, the current policy GDP.

Quote:The GOP tax reform bill passed the House on Thursday and eyes are shifting to the Senate version next.
Both versions include a similar break seemingly aimed at wealthy families: the ability to withdraw from 529 plans to fund K-12 education. 529 plans sound technical, but they're basically just an investment account that allows college savings to grow tax-free, similarly to saving for retirement in an IRA. Current tax law permits families to withdraw their savings only for tuition and expenses related to college or graduate school. The proposed GOP bills allow families to withdraw expenses up to $10,000 a year to pay for private elementary and high schools. That's a big change, and one that could yield significant benefits to wealthy families. A New York Times analysis estimated the savings could be more than $30,000 per 529 account.

The move can be seen as a benefit primarily to the rich, since the tax benefits of 529 plans go almost entirely to affluent families, according to the Brookings Institute. The new plan also benefits families who can maximize their capital gains tax break by withdrawing $10,000 a year to pay for private school starting in kindergarten, instead of waiting for their wealth to build in the account over time. Essentially, the people who would see the largest tax breaks over time are those who have another $10,000 to withdraw every year.

Quote:Trickle-down economics. We understand, that's the basis of this. What are the biggest issues that plague America: Student debt, failing education, health care costs, infrastructure, and worker participation. Worker participation; think about the massive cost of child care, why so many people don't got back to work. Show me where, in this bill, these issues are being addressed.

Quote:One of the most lamentable failures of the repugnant Republican tax plan is the Child Tax Credit proposal. Though the possible expansion of the CTC had been hailed as bipartisan relief for struggling families, this proposal is just one among many that will boost the rich without doing much of anything for the poor. And the conservative reasoning supporting this CTC model is particularly insidious. Expanding the CTC was a pet project of Ivanka Trump, who has long attempted to pass herself off as a champion of women and a moderate voice in her father’s ear, a nonsensical notion in light of her inaction to advocate for the feminist issues she says are important to her. Praising the tax plan, Ivanka said it “takes a big step in terms of helping the American family with the high cost of raising children.” By “the American family,” she meant the wealthy American family.

The current CTC gives up to a $1,000 tax credit for each child in an eligible working family. Similar to the Earned Income Tax Credit in that it’s meant to encourage work (even if work for the impoverished is consistently low-wage and hard to find), the value of the CTC increases as income goes up, begins phasing out at $110,000, and zeroes out at $150,000 (for a married couple). Families with annual incomes under $3,000 receive no CTC, and families who earn between $3,000 and $16,000 receive just a partial credit. It’s partially refundable too—families can receive 15 percent of their incomes over $3,000 back, up to the maximum credit. This feature is extremely important for low-income families, who may earn too little to owe much or any federal income taxes and wouldn’t benefit from just a credit. Without the current CTC, more children would be poor. The CTC was responsible for 1.5 million fewer children in poverty in 2016, and lessened the poverty of another 6.1 million.

But the credit could do so much more. An expansion of the CTC could have eliminated the partial benefit so that poorer families can receive the full credit, and it could have meant expanding the credit to families in deep poverty, like those who earn less than $3,000. Child poverty, though at its lowest rate ever, affects nearly 16 percent of all children. It also could have meant altering the unequal treatment of low-income families regarding their tax refunds—because the CTC is only partially refundable, lower-income families don’t benefit as much as higher-income families. (Currently, since families can only receive a CTC refund equal to 15 percent of their incomes after their first $3,000, a single mother with two children who earns $10,000 a year would only be able to receive $1,050 from the CTC [$525 per child], instead of the maximum $2,000 [$1,000 per child]. Higher-income families would enjoy the full benefit.)

But alas, the Republicans are proposing to expand the CTC in the other direction, so it does an even better job of assisting upper-class families over needier families. For one, the proposal raises the maximum family income needed to be eligible for the credit—in the House’s plan, the tax credit would be available for families making up to $294,000. In the Senate’s bill, which was recently revised, the tax credit would begin phasing out at incomes of $500,000. (The original bill phased out the tax credit at incomes of $1 million.)

Quote:President Donald Trump and his fellow Republicans insist a majority of Americans will benefit from the tax cuts they’re pushing through Congress. But they’re describing that majority wrong. The biggest winners from big tax-cut legislation Congress could pass by the end of the year will be the shareholder class — people who own stocks and stakes in privately held companies. That’s because roughly 75% of the $1.5 trillion in net tax cuts being proposed would accrue to businesses. Wealthy families would get an additional break from killing the estate tax, leaving less than one-fourth of the net tax cut flowing directly to individual taxpayers — and even less to the middle class.