Republicans Propose Big Tax Cuts, But Target Popular Deductions Thursday, Nov 2 2017 

Updated at 1:03 p.m. ET

House Republicans unveiled a draft tax bill on Thursday, calling for deep cuts in both individual and corporate tax rates.

“With this bill, we will grow our economy by delivering more jobs, fairer taxes, and bigger paychecks to Americans of all walks of life,” said Rep. Kevin Brady, R-Texas, chairman of the House Ways and Means Committee.

The rollout, originally scheduled for Wednesday, was postponed to give bill drafters more time. They’re still struggling to find sufficient revenue to avoid a budget-busting score. As a result, some of the tax changes have been made temporary or phased in over time.

Here are some of the highlights of the bill (you can read the full text here):

  • Four individual tax brackets would be introduced at 12 percent, 25 percent, 35 percent, with the top rate of 39.6 percent remaining in place for the very wealthy.
  • Corporate taxes would drop from 35 percent to 20 percent permanently.
  • Standard deduction increases from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.
  • Child tax credit would expand from $1,000 to $1,600.
  • Federal deductions for state and local income and sales taxes to be eliminated, but local property taxes can be deducted up to $10,000.
  • No changes to limits on 401(k) pre-tax contributions.
  • Alternative Minimum Tax to be repealed.
  • Estate tax would kick in at $11.2 million, up from $5.49 million, but it would be fully repealed as of 2024.
  • Corporate profits from overseas would no longer be taxed, but there would be a minimum 10 percent tax on foreign subsidiaries.

The plan leaves intact a top individual tax rate of 39.6 percent to address charges that the cuts are unduly favorable to the rich. The bill would raise the income threshold at which the top tax rate would apply to $500,000 or a million dollars for couples. In a boost for the wealthy, the plan also eliminates the alternative minimum tax and phases out the estate tax over a period of six years.  

Broadly speaking, the GOP bill would sharply reduce taxes on both individuals and corporations, potentially draining trillions of dollars from federal coffers over the next decade. The Republican budget, however, makes room for only $1.5 trillion in revenue reduction over that period. And fast-track Senate rules, designed to avoid a Democratic filibuster, say the bill can’t add to the deficit beyond 10 years.

Republicans hope to offset some of the lost revenue from lower tax rates by eliminating tax breaks elsewhere in the code.

“With this plan, we are getting rid of loopholes for special interests and we are leveling the playing field,” said House Speaker Paul Ryan, R-Wisc.

But that’s politically challenging. Two of the costliest tax breaks — for mortgage interest and gifts to charity — were declared off-limits at the outset, although the draft plan limits the mortgage deduction on future home purchases to loans of $500,000, down from the current $1 million. Efforts to curtail other popular breaks — for retirement savings and state and local taxes — have faced pushback from the White House and Republicans in high-tax states.

The draft bill released by the House Ways and Means Committee would reduce the number of individual tax rates from seven to four: 12 percent, 25 percent, 35 percent and 39.6 percent. The bill nearly doubles the standard deduction, which will make tax-filing easier for some people. However, it eliminates personal exemptions, which could adversely affect larger families.

As expected, the corporate tax rate would drop from 35 percent to 20 percent. And the bill would establish a lower tax rate of 25 percent for so-called “pass through” businesses such as partnerships that currently pay taxes at their owners’ individual rate.

The bill aims to encourage business investment by allowing companies to deduct those costs immediately, rather than spreading the deduction over a period of years. However, this provision is scheduled to sunset after five years.

Multinational corporations would no longer be taxed on profits earned overseas, although the plan would establish a minimum tax rate of 10 percent on foreign subsidiaries.

Although House lawmakers floated the idea of limiting tax breaks for retirement savings, the draft bill unveiled today would preserve the deduction for 401(k) style savings.

The bill would eliminate the deduction for state and local income taxes, a move that’s particularly costly in high-tax states such as New York, New Jersey, and California. In an effort to mollify House Republicans from those states, drafters included a provision to allow taxpayers to deduct up to $10,000 in local property taxes.

The lower limit on mortgage interest that’s tax deductible is sure to invite opposition from the housing industry, a powerful player in Washington.

The Ways and Means Committee plans to take up the draft tax bill next week, with an eye towards a House vote before Thanksgiving. President Trump is eager to sign a tax overhaul by December.

“We’re working to give the American people a giant tax cut for Christmas,” Trump said. “It will also be tax reform and it will create jobs.”

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

Tax Bill Delayed As GOP Divisions On Eliminating Tax Breaks Persist Wednesday, Nov 1 2017 

House Republicans announced late Tuesday that they would delay by one day the release of their long-awaited tax cut bill that GOP leaders have promised will be the most extensive overhaul of the tax code in a generation, as members clashed over curtailing popular tax breaks to pay for trillions of dollars in tax cuts for individuals and corporations.

The bill was supposed to be unveiled on Wednesday, but House Ways and Means Committee Chairman Kevin Brady, R-Texas, announced in a statement, “In consultation with President Trump and our leadership team, we have decided to release the bill text on Thursday.”

Republicans have promised that their legislation will slash taxes for businesses and individuals, simplify the complicated tax code and spur major economic growth. President Trump called on Congress to finalize the bill by Christmas.

“I want the House to pass a bill by Thanksgiving,” Trump said during a meeting with business leaders at the White House on Tuesday. “I want all of the people standing by my side when we get ready to sign by Christmas.”

House Speaker Paul D. Ryan, R-Wis., later agreed with Trump, saying that the two were “linked” on the plan.

“We are ready,” Ryan said. “We are excited, we’re moving.”

Brady told reporters that staff would continue working through the night to negotiate the remaining sticking points, and his statement said that the schedule for his committee to begin its markup of the bill next Monday was still on.

Ryan and other leaders hope the tax bill will be the best chance the Republican-held Congress has to enact one of Trump’s key policy proposals. The legislation is expected fill in the gaps left by an earlier outline that promised to lower the top corporate tax rate from 35 percent to 20 percent, trim the top individual tax rate from 39.6 percent to 35 percent and slash taxes the rate for small businesses to 25 percent. That outline left out how much it might cost to make those low rates possible and what existing tax breaks would be eliminated to help off-set the expense.

Republicans struggled in recent weeks to decide which breaks to eliminate and members were still at odds over fears that the plan could raise taxes on some middle class families in high-cost of living states.

House Ways and Means Committee Chairman Kevin Brady, R-Texas, told reporters that members of his committee were still working to finalize the details. He also would not rule out making additional changes once the bill is released on Thursday.

“We’ll continue on listening mode,” Brady told reporters. “Stay tuned.”

Among the most controversial measures was a plan to reduce amount of money taxpayers could set aside for retirement in 401(k) plans without being taxed. Brady has explored a number of options, including making it easier for taxpayers to utilize other retirement accounts, but many members and outside groups have worried that the plan would gut the widely-popular savings incentives.

“Any changes we make are going to strengthen retirement,” Brady said.

There has also been widespread disagreement with the GOP over plans to make it harder for most families to claim popular itemized deductions, like a credit for mortgage interest. Republican leaders say their plan would reduce tax burden for most families by doubling the standard deduction from $12,000 for individuals to $24,000 for families and increasing the per-child tax credit.

A higher standard deduction would be easier for most families, but homeowners and people who live in expensive cities and states who would normally itemize their deductions could pay more. Republicans have also considered lowering the cap on which mortgages would be eligible for the deduction and eliminating a deduction for taxes already paid to state and local governments. GOP lawmakers from New York and New Jersey have been particularly vocal about those concerns.

Republican leaders have suggested that the plan would keep an existing deduction for property taxes, but Brady said Tuesday that negotiations over state and local tax breaks were still ongoing.

Many members also worry that leaders have not said which tax rates would apply to which tax payers. Republican want to trim the existing seven tax brackets to just three or four with rates of 12 percent, 25 percent, 35 percent and a possible higher rate for top earners. But Brady was unwilling to say which taxpayers would fall into which bracket or whether there would be an extra tax for the very-rich.

Despite the uncertainty, Brady had said earlier on Tuesday the GOP plan was still on track.

“Our plan is to move forward on the current timetable,” Brady said. “We certainly are listening very carefully to make sure we are delivering tax relief.”

Minutes before putting out a statement announcing that the bill would be delayed until Thursday, Brady told reporters that staff were working through the night to keep the bill on schedule.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

Republicans Scrapping Health Care Vote — Again Tuesday, Sep 26 2017 

Updated at 2:30 p.m. ET

Republicans are once again waving the white flag on health care.

Senate Majority Leader Mitch McConnell will announce shortly that he is pulling the Republican health care bill, multiple GOP senators tell NPR’s Susan Davis.

Despite a years-long galvanizing conservative push to “repeal and replace Obamacare,” Senate Republicans could not get on the same page and conceded Tuesday that it once again did not have the votes to pass a plan.

The next push for Congress will be attempting to overhaul the tax code, a perhaps equally difficult task. It’s something that hasn’t been done in 30 years in Congress, but President Trump and congressional leaders are poised to release a “framework” for a tax overhaul Wednesday.

Earlier in the day, McConnell hinted there might not be a vote, saying from the Senate floor that debate on a last-ditch effort to repeal and replace the Affordable Care Act would continue, but he did not commit to a vote.

“It’s an important debate for our country,” McConnell said, opening the Senate’s day. “It’s one that will certainly continue.” 

The GOP bill would have fundamentally overhauled Medicaid from an open-ended federal guarantee to a system that caps funds to the states but would have given them more flexibility on how they spent those dollars.

The legislation appeared to suffer a fatal blow Monday night when Sen. Susan Collins of Maine declared her opposition. Collins was the third GOP senator to come out against the bill, in addition to Sens. Rand Paul of Kentucky and John McCain of Arizona.

Republicans could only lose two senators for the bill to pass through the budget process of reconciliation, which allows for a majority vote instead of the 60-vote threshold ordinarily needed to end a filibuster.

McConnell tried to paint the debate over health care as one of this Graham-Cassidy bill versus a single-payer system. Sen. Lindsey Graham, one of the bill’s principal authors, had called it “federalism versus socialism.” Independent Sen. Bernie Sanders, as well as some Democrats, have touted a “Medicare for all” plan.

But Senate Minority Leader Chuck Schumer of New York took to the Senate floor Tuesday to knock that framing as a “straw man” and a “false choice.”

“Democrats have a lot of ideas about how to improve health care,” Schumer said. “Each of them endeavors to increase coverage, improve the quality of care, and lower the cost of care. None — none of the Republican plans manage to achieve those goals. That’s the difference. The difference is one side wants to cut health care to average Americans, increase premiums, give the insurance companies far more freedom and one side wants to increase care, the number of people covered, lower premiums, better coverage. That’s the divide.”

Schumer also accused Republicans of not wanting to have that debate on the merits and called for “bipartisan way to improve the existing system.”

On the other side of Capitol Hill, House Speaker Paul Ryan did not bring up health care during a news conference and instead focused on something else.

Ryan announced that House Republicans would be discussing Wednesday a “concrete framework for historic tax reform.” He called it “a big moment for Americans.”

President Trump indicated later Tuesday that he has asked members of Congress from both parties “to discuss our framework for tax cuts and tax reform before it will be released tomorrow. We will be releasing a very comprehensive, very detailed report tomorrow. And it will be a very, very powerful document.”

The legislation, Ryan said, would try to create a “tax code built for growth” and “focused on helping American families” and businesses. “We are very, very excited,” he said, adding, “It’s high time we do this.”

Trump said the plan will be based on four principles:

1. “Make our tax code simple and fair.” (He promised Americans would be able to file their taxes on a “single page.”)

2. “Cut taxes tremendously for the middle class, not just a little bit but tremendously.” (Double the standard deduction and increasing the child tax credit.)

3. Lower business taxes.

4. “Bring back trillions of dollars in wealth parked overseas.”

A comprehensive tax overhaul has not happened since 1986.

“Tomorrow is the beginning of a very important process that we are excited about here in Congress,” Ryan said.

As far as health care goes, Ryan noted that the House had done its job by passing a bill in May.

Translation: It’s time to move on.

With Republicans in the Senate unable to pass the latest repeal effort, there is a question of what it could mean for McConnell. He and Trump have not been on the same page and do not appear to have a warm relationship.

Trump has called him out on Twitter previously for not passing health care, and there were reports of an intense, profanity-laced telephone call between the men.

Could this latest failure — and embarrassment for the GOP and the president — be the impetus for Trump to turn up the pressure once again on McConnell? 

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

Trump Gives Congress An Olive Branch With Tax Pitch, But Will It Last? Thursday, Aug 31 2017 

When President Trump traveled to Missouri on Wednesday to make his pitch for tax code overhaul, it was a more conventional — even conciliatory — chief executive who showed up.

Trump expressed optimism that he could work together with the legislative branch to pass something meaningful — although as NPR’s Scott Horsley noted, the president offered scant specifics about what that legislation would be.

“So this is our once-in-a-generation opportunity to deliver real tax reform for everyday, hardworking Americans,” Trump said. “And I am fully committed to working with Congress to get this job done, and I don’t want to be disappointed by Congress. Do you understand me? You understand.”

“I think Congress is going to make a comeback. I hope so,” the president added. “Tell you what, the United States is counting on it.”

Trump has been smarting from failed efforts to repeal and replace the Affordable Care Act in July, which led to very public airing of grievances against Senate Majority Leader Mitch McConnell, R-Ky.

And, as the president has seen his own approval ratings take a nosedive, the fact remains that Congress is even more unpopular than he is. In Missouri, he appeared to allude to those numbers, but didn’t gloat.

GOP leaders sounded receptive to Trump’s tax pitch and underscored they would work together.

“Right now, our tax code is burdensome, incomprehensible, and puts American businesses at a severe disadvantage on the world stage. … That’s why we are committed to reforming the tax code and why President Trump reiterated his commitment today in Missouri. We are united in our determination to get this done,” House Speaker Paul Ryan, R-Wis., said in a statement.

McConnell wrote an editorial Wednesday morning pledging to “continue to work with my colleagues in Congress and the Administration to help middle class families and put the economy on the right track.”

Trump struck a more upbeat — and on-message — tone than he has as of late. At a campaign rally last week in Arizona, Trump was all over the place. He not only defended his controversial comments about blame on “both sides” in the wake of racist violence in Charlottesville, Va., he also drew a line in the sand over funding his Southern border wall.

“If we have to close down the government,” Trump said, “we’re building that wall.”

In that speech, Trump took more aim at Republican than he did at Democrats. He called out the states’ two GOP senators: Jeff Flake, who faces a primary threat and a general election fight in 2018 and has been critical of the president, and John McCain, whose no vote prevented GOP health care efforts from moving forward. In the past, Trump has also criticized Nevada Sen. Dean Heller, who is the most vulnerable GOP senator up in 2018.

But in pitching tax overhaul on Wednesday — likely to the relief of Senate Republican strategists — Trump finally put pressure on a Democrat.

“And your senator, Claire McCaskill, she must do this for you. And if she doesn’t do it for you, you have to vote her out of office,” Trump told Missourians. “She’s got to make that commitment. She’s gotta make that commitment. If she doesn’t do it … you just can’t do this anymore with the obstruction and the obstructionists.”

His remarks were clearer than his tweet over the weekend, in which he spent the limited characters touting his 2016 electoral win in the Show Me State instead of spelling out McCaskill’s name or the word “Senate.”

Normally, a Republican president calling out a vulnerable Democratic senator who is up for re-election wouldn’t be news. But the simple fact that Trump was able to stay on the party message and target a Democratic incumbent — in a state he carried last November — is noteworthy.

Helpful for the party or not, Politico reports that Trump’s comments about McCaskill could present a legal problem — that is, if the words were written by White House aides, who are prohibited from mixing partisan politics and official business. (The president, who may have ad-libbed, is not subject to the Hatch Act.)

Whether Trump can stay on message — and out of tussles with fellow Republicans — as Congress returns from August recess and gets back to legislative business next week is up in the air. Wednesday was an official White House event, and it’s his campaign rallies like the one in Arizona that have often served to strain relations with the lawmakers he needs on his side for a legislative victory.

On Wednesday, it was President Trump on stage, making a pitch to lawmakers. But on the campaign trail he loves so dearly, it’s the free-wheeling Candidate Trump who wants to please his base at seemingly any cost.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

Who Would Enjoy Tax Breaks Under The GOP Health Care Proposals? Friday, Jul 7 2017 

There’s a lot of talk on Capitol Hill about the tax cuts included in the Republican health plans, but unless you are a frequent user of tanning beds or have personal wealth that puts you in the top 1 percent, you might not feel much effect.

The House and Senate bills both change or eliminate more than a dozen taxes that were levied to help pay for the Affordable Care Act’s insurance subsidies and to bolster Medicare and expand Medicaid. Republicans and other ACA critics have argued that the taxes are onerous for businesses and families.

The Congressional Budget Office estimates that the tax cuts and coverage changes in the Senate proposal would reduce the federal government’s revenue by $700 billion over the next 10 years.

We’re answering three key questions about the tax cuts:

1. Which taxes are targeted for repeal?

Most of them fall into two buckets.

Bucket 1: Taxes related to individual income

The ACA levied a 0.9 percent increase in the Medicare payroll tax on income above $200,000 for individuals or $250,000 for couples.

It also added a 3.8 percent tax on net investment income — as in stocks, bonds, interest and capital gains — that kicks in after $200,000 for individuals and $250,000 for couples.

As Senate leaders consider revisions to their bill, some senators — including Republican Bob Corker of Tennessee — have suggested leaving the investment tax in place to provide more money for subsidies, but others have objected to that idea. This would be a major divergence from the House-passed bill.

Still, if both of those taxes in the ACA were repealed, high-income Americans would collectively pay about $231 billion less in taxes over 10 years, according to the CBO analysis.

Bucket 2: Taxes on corporations

Since the passage of the ACA, drug companies and medical device manufacturers have complained that the taxes levied on them have a chilling effect on innovation and affect their ability to hire more workers. They also argue that costs are passed along to consumers in the form of higher prices.

Under the Senate plan, drug companies would see an estimated $25.7 billion cut over 10 years, while medical device makers would get about $19.6 billion in savings. Some of the cuts would start as early as this calendar year.

In both bills, there’s also relief for insurers. The GOP plans would eliminate a tax on all insurers based on their market share. Congress waived the tax this year, hoping the one-time move would help slow premium increases. The CBO analysis of the Senate bill found a permanent cut would save the industry $144.7 billion over the next decade.

Other taxes outside the buckets

Smaller but not insignificant cuts come from eliminating other taxes, including a limit — $2,600 this year — on how much workers can annually set aside tax-free in flexible spending accounts to pay for things like medications, eyeglasses or co-payments for doctor’s office visits. The plans would also increase the amount people could put in tax-protected Health Savings Accounts. The Senate proposal would also revert tax law back to pre-ACA days in setting the threshold for medical deductions at 7.5 percent of adjusted gross income; the ACA had boosted that to 10 percent. The House approach is even more generous.

And not to be forgotten: The GOP plans would delete a 10 percent tax on the use of tanning beds.

2. Am I going to get a large tax break from this?

The short answer: unless you’re wealthy, probably not.

The ACA significantly increased average taxes on high-income people mainly through the investment income tax and the Medicare payroll tax. So the top 1 percent and other high earners are the group that would benefit most from the repeal, according to several analyses, including one by the Tax Policy Center, a nonpartisan think tank in Washington, D.C.

Under the GOP proposals, the top 1 percent — those earning $875,000 a year or more in 2026 — would get an average tax cut of about $40,000 per year, while middle-income people earning about $50,000 to $90,000 would see about a $300 cut, according to Howard Gleckman, a senior fellow at the center.

Those earning about $28,000 or less could save an average of $180 a year through the changes to limits on FSA and HSA contributions and the threshold on medical deductions, he says.

3. How will the federal government offset the loss of tax revenue, and what will that mean for insurance or other programs?

Even though the tax cuts and other changes would reduce Treasury revenue by about $700 billion over the next decade, spending cuts exceed that amount, so the deficit actually goes down by $321 billion, the CBO says.

The biggest spending cuts hit the Medicaid program, which provides health coverage for low-income children and adults and people with disabilities. Medicaid pays for nearly half of all births and much of the cost of nursing home care. Spending on Medicaid by 2026 would shrink by 26 percent compared with what it would be under the ACA.

As to other effects, the number of Americans without health insurance coverage would rise, the CBO says. Because the GOP proposals cut the tax penalty for not having insurance, it estimates that far fewer people would enroll in coverage. That, coupled with smaller subsidies to help lower- and middle-income people buy their own insurance and cuts to Medicaid, could lead to 22 million fewer insured Americans by 2026, the CBO says.

States could choose to try to make up for federal Medicaid spending cuts and maintain current levels of coverage, but that would probably involve raising state taxes, cutting other budget items such as education, or both.

Kaiser Health News, a nonprofit health newsroom whose stories appear in news outlets nationwide, is an editorially independent part of the Kaiser Family Foundation.

Copyright 2017 Kaiser Health News. To see more, visit Kaiser Health News.

State Budget Director Predicts $113 Million Revenue Shortfall Tuesday, May 2 2017 

State budget director John Chilton says Kentucky is on track to take in $113.2 million less than predicted by the time the fiscal year ends on June 30, meaning Gov. Matt Bevin might have to take emergency actions to balance the state budget.

State revenue fell by 3.2 percent in the third quarter of the 2017 fiscal year compared to last year, breaking a streak of three consecutive years of growth, according to the budget director’s quarterly report.

The state constitution requires the governor to make sure the fiscal year ends with a balanced budget, meaning Bevin might have to reduce spending in some agencies or tap the state’s $209 million rainy day fund.

In 2014, then-Gov. Steve Beshear filled a $90.9 million budget shortfall through a combination of agency cuts, an infusion from the rainy day fund and other measures.

The state budget director blamed this year’s revenue shortfall on weak jobs growth leading to less-than-expected revenues from the income tax and sales tax.

“In recent fiscal years, overall General Fund growth has leaned heavily on the largest two taxes, individual income and sales,” Chilton writes in the report. “Weaker [income] withholding growth, coupled with the FY17 slump in the sales tax, have combined to depress overall revenue collections.”

Income tax revenue grew by 2.4 percent through the first three quarters of the fiscal year and the sales tax grew by just 0.6 percent according to the report.

The report could be a boost to Bevin’s argument that the state needs to revamp its tax code.

Bevin says he wants to call lawmakers back to Frankfort to negotiate tax and pension changes later this year and has signaled he wants to shift the state away from being dependent on income taxes and more dependent on consumption like sales or property taxes.

Meanwhile the state’s road fund is in slightly better shape than predicted. Revenues going into the road fund are expected to be 1.2 percent more than last year — $44.2 million more than predicted.

Trump Administration Proposes ‘Massive’ Tax Overhaul And Tax Cut Plan Wednesday, Apr 26 2017 

Updated at 4:12 p.m. ET

The Trump administration Wednesday put forth a proposal that it labeled a “massive” tax overhaul, which would give big tax cuts to individuals and corporations and reduce the number of tax brackets and deductions.

Outlined at a White House press briefing by Treasury Secretary Steven Mnuchin and Gary Cohn, director of the president’s National Economic Council, it would reduce the number of individual tax brackets to three, as well as eliminate most tax deductions other than for home mortgages, charitable contributions and retirement savings.

It would double the standard deduction individuals can take and proposes cutting the corporate tax rate from 35 percent to 15 percent.

The plan would exempt the first $24,000 of income from taxation. It would also repeal the estate tax and the alternative minimum tax, which could benefit wealthy taxpayers, including President Trump himself.

The plan would also eliminate the deduction for state and local taxes, a step that could hurt taxpayers in places with high state taxes such as California and New York.

Administration officials acknowledge the plan is a broad brush outline, with specific details yet to be determined.

Among the details that remain to be revealed, or worked out, is the overall cost of the plan and whether it would be revenue-neutral or add to the deficit. Mnuchin said the plan “will pay for itself with growth” and with the reduction of deductions and loopholes.

It’s also unclear at what income levels the new proposed tax rates would kick in.

The plan was released as the Trump administration scrambles to show its accomplishments as it nears the 100-day mark on April 29, but the plan is far from complete — and far from becoming law.

Republicans responded favorably to the proposal. A statement from House Speaker Paul Ryan, along with the chairmen of the House and Senate tax-writing committees, said, “The principles outlined by the Trump Administration today will serve as critical guideposts for Congress and the Administration as we work together to overhaul the American tax system and ensure middle-class families and job creators are better positioned for the 21st century economy.”

Democrats see it differently. House Minority Leader Nancy Pelosi called the outline “short on details and long on giveaways to big corporations and billionaires.” And top Democrats on the House Ways and Means Committee labeled it “a rerun of the same failed tax policy that led to the Bush tax cuts in 2001 and 2003, which cost us trillions of dollars, did nothing to help working families, and, in part, contributed to the Great Recession.”

Speaking Wednesday, Mnuchin also addressed the issue of the president’s personal tax returns. The Treasury secretary said Trump “has no intention” of releasing his own tax returns and asserted that the president has “given more financial disclosure than anyone else.”

Democrats have said they want to see how any tax overhaul would affect the president’s taxes before agreeing to sign on to any tax cuts. It is unclear how serious a demand that is, but at the very least, cutting taxes and overhauling the system to the extent the Trump administration wants is going to require lengthy negotiations and compromise, and the final outcome is far from assured.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

Trump Administration Vows ‘Biggest Tax Cut,’ ‘Largest’ Overhaul In History Wednesday, Apr 26 2017 

Updated 9:45 a.m. ET

The White House is banging the drums that President Trump is doing something big again ahead of his 100th day in office — unveiling a tax “plan.”

“This is going to be the biggest tax cut and the largest tax reform in the history of our country,” Trump’s Treasury Secretary Steve Mnuchin said at a panel Wednesday morning.

But what’s coming out later Wednesday afternoon are guidelines, not legislation, akin to what would be revealed in a campaign. Though there’s no sign Congress is ready to take this up immediately, Mnuchin made it sound urgent, saying the administration wants to move “as fast as we can.”

The guidelines do set out the president’s priorities, so let’s take a peek:

1. First, what’s in it?

A few things:

15 percent business rate: The headline is a 15 percent business tax rate. That cuts the corporate tax rate down from 35 percent.

Small businesses would benefit: It would include companies that don’t pay through the corporate tax code, but for private businesses that pay through the income tax code (39.6 percent at the top). So that means small businesses would see a big cut.

Trump himself stands to gain tens of millions: This plan would be a windfall for Trump. He pays taxes for his businesses through the income tax code, so his plan would slash his own tax liability potentially in half, saving himself tens of millions of dollars.

Modest middle-class cuts: There would also be tax cuts across the board, including a modest one for those considered middle class.

Fit on a postcard? Trump’s Treasury secretary said this plan would seek to simplify the tax code by allowing people to fill out their taxes on a “large postcard.” While people always like the idea of making it easier to fill out their taxes, they might not like what benefits they’d potentially lose. It could mean doing away with popular deductions like the home mortgage deduction, something that back in December Mnuchin said Trump’s plan would scale back.

2. How is this paid for?

In one ambiguous word: growth.

“We fundamentally believe we can get to 3 percent sustained economic growth,” Mnuchin said Wednesday morning.

(Trump actually promised 4 percent during the campaign.)

Experts predicted during the campaign that Trump’s various iterations of his tax plan would blow a hole of trillions of dollars in the budget, even bigger than the Bush tax cuts.

That was true even using dynamic scoring, which takes growth into account.

The nonpartisan Tax Policy Center says that lowering the corporate tax rate from 35 percent to 15 percent would cost more than $2 trillion over a decade, for example.

No BAT, man: Part of how House Speaker Paul Ryan wanted to pay for this (and it would still only be part) was through what’s formally called a border-adjustment tax, or BAT. It’s basically an import tax. But the Trump administration’s early embrace of the BAT landed them in political hot water. Why? An import tax would mean a lot of things Americans buy at grocery and retail stores would go up.

That why it’s being left out, because it’s seen as too controversial right now. The last thing Trump wants is to have the narrative hijacked and turned into how he’s proposing to increase the cost of everyone’s avocados.

But, once again, it’s another revenue source shut off.

3. If the BAT was Ryan’s idea, what kind of buy-in does President Trump have from Republican leadership in Congress?

After the failed health care bill, the White House has been trying hard to show it is taking the lead on this one.

Trump wouldn’t own Trumpcare (or was it Ryancare?), but this tax overhaul is all him. For now, Republican leaders are saying they’re OK with that (at least publicly).

“We all agree on the benefits of tax reform and the place we want to land, and the question is how you reach that place,” Ryan spokeswoman AshLee Strong said in a statement. “We continue to have productive discussions with the administration about all ideas on the table.”

In other words, that’s a nice way of saying this is at the infant stages. Congress still has to write and pass a bill. A tax overhaul hasn’t been done in 30 years, and there are plenty of people on Capitol Hill who will want their hands on this.

4. Is there anything in this plan for Democrats?

There aren’t a lot of details, but Politico and the Wall Street Journal report that what’s unveiled Wednesday will include infrastructure and child-care tax credits that have been pushed by Trump’s daughter, Ivanka Trump.

Those were priorities during the campaign, but they weren’t attached to a tax plan. It’s an attempt to paint Trump as bipartisan in trying to get Democrats on board since those are measures they’d likely have some measure of support for — although the details are always what matter.

But a tax overhaul, which again hasn’t been done in 30 years, is hard enough without attaching a $1 trillion infrastructure plan and a $500 billion child-care tax credit.

Democrats certainly don’t want to couple those programs with tax cuts they feel overwhelmingly benefit the wealthy. “You didn’t hear much of anything about working families,” Oregon Democrat Ron Wyden told Politico. “I’m certainly not going to support a tax proposal that gives crumbs to working families and cakes to the fortunate few.”

Even Republicans are skeptical they can put them together. “It’s probably going to end up being, in the end … a Republican-only exercise,” John Thune said in the same story.

So at this point, all of this appears to be another show for Trump’s public relations ahead of the 100-day marker, one he’s calling a “ridiculous standard,” while at the same time launching a website touting all of his accomplishments.

There are many, many questions about the feasibility of this plan, and you can be almost guaranteed it will change quite a bit before there’s any vote to make any of it law.

There’s a long way to go.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

What Is Tax Reform And Why Does Gov. Bevin Want It? Friday, Apr 21 2017 

Jim Carroll started working for Kentucky’s state parks system in 1978 making $780 a month.

“So I knew the pay wasn’t good but I knew that it was a place where you could advance over time,” Carroll said. “It was stable, and retirement was part of that.”

Carroll later worked in the tourism cabinet and retired in 2009. Since then, he’s organized a group of concerned state pensioners called Kentucky Government Retirees.

Carroll draws a monthly pension from the retirement system for most of Kentucky’s state workers, Kentucky Retirement Systems. Depending how you measure it, KRS has one of the lowest funding levels in the nation.

“It would have never occurred to me to be concerned about it until the last few years,” Carroll said.

Over the course of nearly two decades, the state didn’t put enough money into its pension funds and now the state is short about $35 billion. The bottom line is Kentucky only has about 17 percent of the money it needs to write checks to current retirees and those who retire in the future.

Now the state needs to come up with more money to put into the pension systems — either by cutting programs or raising more money from taxes.

Gov. Matt Bevin already cut spending across most of state government during last year’s budget session and now he wants to come up with a way for the state to get more revenue — the often-discussed but never fulfilled “tax reform.”

“There are people who support me and have supported me who won’t like this,” Bevin warned during his State of the Commonwealth address earlier this year.

“This is not going to be a tax-neutral tax plan,” he said. “It’s not, we can’t afford for it to be. That’s a straight-up fact.”

‘Leaving money on the table’

During that speech, Bevin called for reviewing about 300 tax breaks for possible elimination so the state can capture more money through taxes. He said he wants the state legislature to reconvene later this year to overhaul Kentucky’s tax code and come up with solutions for the state’s ailing pension systems.

It’s unclear if that special session will happen and details are still fuzzy as to what the governor wants and what the legislature will go along with.

Jason Bailey, with the progressive-leaning Kentucky Center for Economic Policy, said the state is “leaving money on the table” by allowing so many tax breaks — Kentucky exempts more money through tax breaks than it collects through tax revenue.

“The money would be a lot better spent in making college more affordable,” Bailey said. “We’ve only cut and we haven’t generated any new revenue and there comes a point where you can’t cut anymore.”

But some tax exemptions are widely popular — for example, the state doesn’t collect sales taxes on groceries or prescription drugs.

Bevin has hinted he wants a major overhaul of the state’s tax code by shifting the state “from production-based tax economy to a consumption-based tax-economy.”

That could mean the state not relying as much on taxing people’s incomes.

A handful of states like Tennessee, Texas and Washington don’t have income taxes — they rely on other sources of revenue like sales or property taxes.

And Bailey worries that higher sales taxes would hurt poor people because they spend most of the incomes they earn — and all their spending would be taxed at a higher rate.

“Those people at the top don’t spend all of their income, so not all of their income is subject to sales tax,” Bailey said.

‘We need more revenue’

Jim Waters is president of the Bluegrass Institute, a free-market think-tank. He says a shift away from an income tax would encourage people to save and invest more. Waters says the income tax “punishes productivity and growth.”

“So the more an individual produces, the more they’re punished,” he said.

Waters also argues the premise of tax reform shouldn’t be to generate more revenue, saying the state already has enough money to maintain necessary programs.

“We think it’s important to have tax reform, not so the government can have more money to spend on wasteful programs, but that so we encourage investment, savings and productivity,” he said.

Jim Carroll, the former state worker who runs Kentucky Government Retirees, says he doesn’t want to see as many budget cuts — he wants the state to find more money.

“We need more revenue,” Carroll said. “How we get there is another matter, I don’t pretend to know that. It seems to me that we need more revenue to meet our critical needs.”

It’s still unclear if the special session for tax reform will even happen. Many Republicans have been uneasy by the idea of increasing tax revenue.

But Bevin’s administration is apparently moving forward — earlier this month it put out a request for tax law experts to come up with a report about possible taxation options.

Some Tax-Cut Backers Urge Trump To Drop Full Overhaul, Go For Quick Win Thursday, Apr 20 2017 

If you filed for an extension on your taxes this week, you’re right in step with the Trump administration and Republicans in Congress. They’ve put off voting on their promised tax overhaul until after they take another whack at repealing and replacing Obamacare.

That’s got some Republicans concerned, including Stephen Moore, who was an economic adviser to the Trump campaign.

“You, know, you’ve got a period when you’re first elected when you’ve got to rush to get things done,” says Moore, “before that window slams shut.”

But here we are in mid-April, Moore says, President Trump has no legislative victories, and his Treasury Secretary Steve Mnuchin says a tax cut will have to wait until the fall.

Moore believes Trump needs a win and should push a tax right now.

“Do something that’s achievable,” he says, pointing out that Trump ran on a corporate and business tax cut. “Get that done. This is taking too long and it gets harder to do as each week goes by.”

Moore does have some skin in this game: He’s co-author of the tax overhaul plan Donald Trump ran on during the election. But nearly 100 days into his administration, Trump hasn’t sent Congress that or any other tax plan.

Moore thinks the lack of a tax bill already is having negative effects: Growth seems to be slowing, and the latest monthly jobs numbers for March were disappointing. When he talks to investors and businesses and asks why things seem to be slowing, they say they’re getting nervous that Trump’s tax cut may not happen.

Jon Traub, a former Republican staff director at the tax-writing House Ways and Means Committee, says the outlines of a Trump tax bill are still unclear. “We’re still waiting to figure out what President Trump is going to embrace,” says Traub, who’s now at the consulting firm Deloitte.

The biggest question, he says, is whether Trump will get behind the controversial border adjustment tax. It’s a key element of a dramatic plan supported by House Republican leaders to overhaul the tax code. The proposal, a 20 percent tax on all imports, is attractive because it would raise a huge amount of revenue. The plan simultaneously eliminates taxes on American exports.

The proposal has divided the U.S. business community. Not surprisingly, retailers like Walmart that import products they sell, hate it. On the other hand, exporters like Boeing love it.

“The president has given mixed signals on that issue,” says Traub. “I think it’s fair to say that without his active support, that proposal can probably not pass the House or the Senate.”

If Trump doesn’t support the border adjustment tax, he would need to find some other way to raise the hundreds of billions of dollars in revenue needed to cut tax rates without adding to federal budget deficits. The White House has floated several ideas for getting that revenue, including a carbon tax and a value-added tax (VAT); neither previously has had much Republican support.

Traub says that “shows how desperate” the administration is to find a large source of revenue, “other than the border adjustable tax, as a way to finance lower corporate tax rates.”

Stephen Moore says it’s time to stop worrying about whether tax cuts will add to budget deficits. And for now, Moore says, Trump should forget about doing a big complicated tax overhaul.

“One of the lessons, hopefully, Republicans learned from the health care debate is, ‘keep it simple, stupid,’ ” he says. “The fewer movable parts, the easier it is to get it through Congress.”

What would simple look like? According to Moore:

  • Allow businesses to immediately deduct the full cost of capital purchases, such as factories and equipment.
  • Cut the corporate tax rate from 35 percent to 15 percent.
  • Have an even lower tax rate on money U.S. companies bring revenues back from overseas.
  • Require that some of that repatriated money be used to improve U.S. infrastructure.

Moore and other prominent Republicans pushing these ideas, including publisher Steve Forbes and economists Larry Kudlow and Arthur Laffer, say even some Democrats might support them.

Copyright 2017 NPR. To see more, visit http://www.npr.org/.

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