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Thursday’s dispatch: What’s in the tax bill Republicans are voting on?
Two weeks after tax legislation passed the House, Republican senators are expected to vote on their tax plan sometime Thursday or early Friday.
In the first few years, most Americans are likely to see a tax cut. But in the long-term, the bill would increase the financial burden on low-income and middle-class families, because of tax cuts expiring in 2025, the repeal of Affordable Care Act’s individual mandate and slower inflation.
Overall, the Senate bill’s $1.4 trillion in tax cuts would largely go to those making more than $100,000 or to large corporations. The corporate income tax rate would be slashed from 35% to 20%, and the estate tax would apply to almost no one.
But the Republican tax plan does much more than change the tax code. Here are several ways the plan would change the lives of millions of people:
Doubles deduction for teachers. Teachers would be able to deduct $500 in personal income spent on school supplies, doubled from $250. The House plan eliminates this deduction.
Churches could become political. Since 1954, churches have been barred from participating in political activity. The Senate tax bill would repeal that law.
Tax tuition. Graduate students would have to pay taxes on tuition waivers they are given at universities. That would increase their tax burden by thousands of dollars — even though the students’ bank accounts do not receive money from the waiver.
Doubles standard deduction. Couples would not pay taxes on their first $24,000 in income. Individuals would not pay it on their first $12,000.
End deduction for settlements. Companies would no longer be able to deduct money paid out in sexual misconduct settlements.
State and local deduction. The Senate bill eliminates individuals’ ability to deduct their state and local taxes from their federal taxable income. In high-tax states like California and New York, it means residents will have a higher income to pay federal taxes on. In the House, a deduction of up to $10,000 in state and local property taxes is preserved.
It ends personal exemption. You can no longer claim $4,050 for yourself, spouse and each of your dependents. If you have three or more kids, that may make you a net loser under the tax bill.
Allowing drilling in the arctic. To secure support from Sen. Lisa Murkowski (R-Alaska), the Senate tax plan would allow oil drilling in the Arctic National Wildlife Refuge.
Ending the individual mandate. As mentioned, this is projected to have a negative impact on low-income and middle-class families. The bill also strikes at a core provision of the ACA — setting the law up to collapse over time.
Other major changes to health care. As Vox’s Sarah Kliff explained, the Senate plan will increase health insurance premiums, will cut $25 billion annually from Medicare and cut Medicaid enrollment by 5 million people.
Expands the child tax credit. Families would receive a tax credit for $2,000 per child. The House legislation increased the credit to $1,600.
Today’s question: Do any of those changes impact you? If so, please email me how and whether you support the plan.
Please email us your thoughts at email@example.com.
Thursday in Trump’s America:
Will tax reform pass? It looks like it’s coming down to Sen. John McCain (R-Ariz.) yet again. Murkowski has said she’ll vote for the bill. Sens. Susan Collins (R-Maine), Ron Johnson (R-Wis.) and Steve Daines (R-Mont.) all voted “yes” on Wednesday for the bill to clear a procedural hurdle, but it’s not clear if they’ll support the bill in a final vote.
McCain has played coy all week about his support of the tax plan. He also supported the procedural vote, but famously killed the Senate’s first ACA repeal attempt with an early morning thumbs down that shocked Republicans.
The bill could come up for a vote Thursday evening or early Friday morning.
DACA triggering shutdown? The second-highest-ranking Democrat in the Senate said he will not support a government funding bill that does not include protections for DACA recipients. Sen. Dick Durbin (D-Ill.) joins four other senators and a couple dozen House Democrats in demanding legislative protection of immigrants who came to the U.S. as children.
International spat: London Mayor Sadiq Khan is calling for Trump to not be allowed to visit the United Kingdom after the president shared unverified anti-Muslim videos on Twitter.
Interesting choice: Don Blankenship, the coal mine CEO who went to jail for his role in the deaths of 29 mine workers is running for Senate as a Republican in West Virginia.
Matt Lauer: The former NBC Today host has now apologized. That followed a Variety story detailing multiple sexual assault and harassment allegations against Lauer, and a New York Times story that details an alleged rape by Lauer in his NBC office. He also reportedly sexted interns.
Russia investigation: Amid talk of a plea deal for former national security adviser Michael Flynn, special counsel Robert Mueller has delayed a grand jury hearing. Mueller’s team has also met with Trump son-in-law and adviser Jared Kushner as part of the Flynn investigation.
Al Franken: A fifth woman has now accused Sen. Al Franken (D-Minn.) of groping her during a photo op in Kuwait in 2003.
2020: Add Rep. Luis Gutierrez (D-Ill.) to the list of those considering 2020 presidential bids. Gutierrez, who is retiring from the House, is a leading advocates of immigration reform.
Under the radar:
In education: A fight is brewing between disability, immigrant and civil rights groups and New York state education officials over testing requirements for minority and disabled students. Secretary of Education Betsy DeVos will have to make the call on whether those students should be required to take the same tests as other students — a standard New York wants waived.
Climate change: The phrase is disappearing from government websites and now, researchers are not including it in grant applications — wary of angering the Trump administration.
Economists explain why “trickle down economics” have not historically benefited middle class Americans. Click or tap the video below to watch.
Correction: Nov. 30, 2017