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Bravo to Idaho Republican Sen. Mike Crapo, who just released the Senate’s draft of the tax bill. In many ways, this version is a polished-up improvement from the House bill. Most importantly, it makes virtually ALL the 2017 Trump tax cuts permanent. It also weeds out some of the troubling aspects of the House bill.
Its biggest flaw is the shortage of meaningful spending cuts out of our bloated $7 trillion enterprise, but I’m assured by Senate leadership that more cuts are to come this fall when the budget is finalized.
REPORTER’S NOTEBOOK: WHY THE SENATE IS UNLIKELY TO DEBATE THE ‘BIG, BEAUTIFUL BILL’ UNTIL NEXT WEEK
Here is my quick assessment of the best and worst features of the tax components of this latest version of the bill that will head to the Senate floor in as little as a week or so:
The Good
- Restores the $10,000 SALT cap – as opposed to the preposterous $40,000 cap in the House bill.
- Makes almost all 2017 Trump tax cuts permanent, including capital expensing provisions, school choice tax credits, and opportunity zones.
- Limits the remittances tax to cash transactions rather than the House approach that dinged bank transactions – which would inhibit foreign investment in the U.S.
- Caps no tax on tips at $25,000 and on tax on overtime at $12,500 per year
- Adopts “current policy” baseline to lower the supposed “cost” of the bill.
SENATE PANEL NAVIGATES DELICATE COMPROMISES ON MEDICAID, TAXES IN LATEST CHUNK OF TRUMP’S MEGABILL
The Bad and the Ugly
- No cut in corporate tax rate (Trump wanted 15%).
- Cuts the tax on earnings from university endowments to only 8% versus 21% in the House bill
- No private foundation excise tax on their investment earnings.
- Excludes the Trump idea of a 15% business tax on made-in-the-USA products.
- Eliminates the House-passed expansion of Health Savings Accounts (HSAs) which helps reduce medical costs.
- Extends many Green New Deal energy giveaways past the end of Trump’s term.
- Retains the unfair double tax on immigrant remittances.
The finish line is now in site. The two chambers aren’t too far apart and so reconciling the differences quickly and getting the gemstone of the Trump agenda on the president’s desk for signature very soon should be easily achievable.
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This will be an enormous victory for American families, workers and businesses and will stave off a $4 trillion tax hike on January 1 – something the congressional Democrats seem fine with.
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Failure is not an option unless some Republicans prefer a suicide mission to blow up the economy and get wiped out in next year’s midterm elections.
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