Article Links:
BBC
Fox News
President Trump looks to make good on his promise to the American people to pass legislation for tax cuts by the end of this year. With the House of Representatives looking to vote on the final bill next Tuesday, and the Senate voting later in the week, the President's efforts seem to be coming to fruition. Republicans have promised that the bill would provide tax relief for American citizens of all income levels, although Democrats and other critics disagree, stating that it would benefit the rich and big businesses. Although many opposing the bill have hoped that Doug Jones, the winner of the Alabama Senate election, may tip the scales, it seems he will not be sworn into office before the voting on this bill.
"The plan brings the US corporate tax rate down to 21% from the current 35%. The top individual income tax drops to 37% from 39.6%" (BBC). While tax cuts for businesses may be permanent, tax cuts for individuals are likely to expire by 2026. This will amount to billions of dollars added to the already high national debt.
More information on the final tax plan here:
What's in the final tax plan?
We have learned about the process in which a bill becomes a law recently in AP government. The bill has just passed the combined House-Senate conference committee and will be voted on by both houses of Congress. Obviously, if the bill reaches the President, he will sign it into law. Republicans hold a majority in the Senate 52-48, and passed their original Senate bill with a 51-49 majority, with only Republican Senator Bob Corker voting against. However, Corker has stated he would support the bill despite initial reservations. Because the Vice President decides the Senate vote in the case of a tie, and Mike Pence obviously backs the bill, Republicans can afford to lose no more than two of their own party's votes. Due to the increasing polarization in today's Congress, this is not likely. The House of Representatives also has a Republican majority, but we shall see their voting outcome soon.
Discussion Questions:
What do you think of the new tax bill and will it help all American citizens?
Do you believe Republican victory is most likely here?
14 comments:
I think the tax bill is better than it was before but still has lots of problems, such as repealing the individual mandate. Without the individual mandate, millions (according to the CBO, around 13 million) mostly healthy people who are currently buying health insurance because of the individual mandate will go without insurance, so the old and unhealthy people will have to pay the difference (premiums are predicted to go up 10%). This seems like a poor choice because of the damage it could do the insurance markets. In addition, it shifts the weight of paying for health insurance to the old and unhealthy who are usually unable to work. The rest of the bill also has problems and seems to favor specific parts of the Republican base (for example, parents can now set up a 529 plan to save money to send their kids to private religious schools).
I agree with Meiling with regards to the fact the tax cut will benefit the people more than before, but some issues still can cloud its impact. With the new tax cut, there will be more capital spending, it will boost productivity, wages, and jobs, and reduce inefficiencies in economy. However, the tax bill can increase deficit, raise inequality, in terms of higher income benefit, and cause wage skepticism. The tax proposal will likely benefit the wealthy tax payers which I believe isn't the right approach to policy. Many middle and low class citizens won't benefit from it. I think that more of the benefits of these tax deductions go to upper-income Americans in higher-tax states. The Republicans are favored in my opinion because it's weighted heavily toward the corporate side.
I feel like the main skeptical part of this bill is the huge tax cut for corporations. Seeing that Trump is a huge businessman who owns many corporations, there could be some alternate reason for Trump pushing for such a gigantic cut that the general public or even Congress may not know about. I don't think it'll be a huge problem that the national debt will increase since it's such a common occurrence now, but passing this bill may be very harmful if Trump has hidden intentions behind this bill. To answer the last question, a Republican victory is most likely here since I believe almost all Republicans would favor a tax cut proposal like this, even if it may be much more advantageous for corporations than other elites.
Like previous comments, I am rather skeptical of the plan, as well. While it may be "less aggressive than earlier proposals," I do not think that it would be a more advantageous plan than it is disadvantageous for all the reasons previously mentioned. In particular, I think the part of the plan that would allow for drilling in Alaska would be disadvantageous for reasons more expansive that simply economical. Companies will be allowed to drill in areas that were previously protected, but they were protected for a reason. The drilling will alter the landscape of the environment, and consequently, will alter the interactions between organisms that exist in the environment. Wildlife needs to be protected at some level and the oil that companies drill will contribute to global warming, further contributing to environmental damage. Ultimately, environmental damages, too, will contribute to economic issues in the future when oil is depleted.
I agree with Alex and Meiling in the fact that the tax cut will do more help now but does have some problems that could be fixed. The tax cut will increase capital spending and productivity but it will also probably benefit the wealthy more so than the lower or middle class. Furthermore, the tax cuts for individuals will likely expire by 2026. I believe the bill will most likely be passed due to the Republican majority in Congress and the President.
Update on the Senate vote on the tax bill:
Republican Senator John McCain will be returning to Arizona due to troubles with brain cancer. Therefore, he will miss the Senate vote on the tax reform bill. Despite this, Republicans are still confident that they can pass the bill because of Bob Corker's announcement to support it.
There's definitely a huge cut for the corporate tax rate, unsurprisingly. A lot of things in the bill favor Republicans, and the deduction limit for state and local taxes hits California and New York residents pretty hard. However, what I don't understand is how opening the Arctic National Wildlife Refuge to oil drilling made it onto the bill, as if all the Republican representatives in Congress bandwagoned onto Trump's non-belief of global warming. This not only increases oil production in a world where people are attempting to shift to more renewable energy sources, but it does so where ice is already melting at an increasing rate.
Given the current ideological makeup of Congress and the presidency, along with the content of the bill itself, I believe that it’s highly likely that the bill will be signed into law and put into effect. Additionally, I agree with previous commentators that the new tax cut will likely benefit the wealthy more than the middle/lower-class population, which isn’t ideal in the long-term, though it is in line with Trump’s ideology and background as a businessman. Furthermore, I agree with Chris that the measure attached to the bill that would open the Arctic National Wildlife Refuge to drilling is a cause for concern and can have detrimental effects if the bill were to be signed into law.
There is no doubt that this bill will pass, even with Senator McCain's absence. Bob Corker has already signed on to the bill, as well as Senator Marco Rubio, who was holding out for a while. Everything on the bill is good, expect for the fact I don't get why oil drilling will be included in a bill on taxes. It is likely because the lobbyists of big oil tycoons paid a ton of money to Republicans, so that may be why, but that is the only downside, as it will probably hurt the environment. Despite this, it also has content related to renewable energy, such as giving tax credits to those that purchase electric cars and wind and solar companies, so that is a good step, especially from Republicans, who often deny climate change's reality. Ultimately, this bill's role is to help stimulate the economy by supply-side/trickle down economics and reducing taxes so that people have more money to spend on American goods and services.
I think the Republicans are passing the oil drilling as a Rider to the bill because they know that it's more unlikely to get support on its own. If they had tried to pass the drilling in the Arctic National Wildlife Refuge on its own, there would likely be more backlash from environmental interest groups. It's kind of a cheap and underhand way to pass a provision, but unfortunately, like everyone else has said, I think it will pass. There is enough support and Republican majority to pass the bill, even with Senator John McCain's withdrawal due to illness.
Something else that bothers me is that the corporate tax cuts are permanent, but individual tax cuts are not. After 2025, all the benefits for individuals disappear, but corporates still reap the benefits of their flat 21% corporate tax rate. This rate is also inherently unfair for smaller companies who will have a harder time paying their taxes than giant companies, but moreover, this clearly benefits businesses benefits more than it benefits people. Trump and his administration need to remember that they don't represent the business industry anymore, but as the unfortunate president of the United States, are obligated to think of the people instead.
I respectfully disagree with Sahith and Caroline on their analysis of the tax bill, and I'll explain why. Passing the Republican Tax Bill is good for the nation because freeing up more capital for the big businesses will help corporate employees and blue collar workers in the long run with raises and benefits becoming increasingly available. Of course, the Republican Bill will not be good for everyone as there are always winners and losers when it comes to taxing the public. In this case, it will most likely adversely affect those who are self-employed with a whole bunch of new regulations and complications in that regard. And, since approximately 35% of the American public currently pays 0 federal income tax, that will be raised marginally for the lowest earning Americans. Honestly, it is quite ridiculous that before this bill, they never paid a single dollar to the federal government when tax filing day came around.
I firmly believe that Republicans will achieve victory on this tax bill despite initial opposition from certain Senators who wanted provisions that would benefit their own constituents because they realize that this is probably going to be their last chance for change for a long time. It would be political suicide for any Republican to vote no on this bill.
This is a major win for the Trump campaign. This bill could be something that Trump rides to have a somewhat decent first year as president. The tax bill has not only fulfilled promises to the Republican voters but also strips away the Obamacare mandate. The clause stipulates that it is no longer mandatory to buy Obamacare, an idea that has been pushed very hard in the Republican camp.
.
I was happy to hear that the electric vehicle tax credit will remain in the law. Killing the credit would have hurt car companies and would have made it harder for people to switch over to more expensive electric vehicles. I think this compromise will continue to drive innovation and help companies battling California's mandate to produce more zero-emissions vehicles. However, I also have doubts about the bill. To answer the first question, don't think it will help all citizens. The people who are in need of tax breaks the most are receiving relatively minor cuts in comparison to the wealthy, who will continue to accumulate more mansions and private jets. Slashing Medicare and other government programs definitely will not citizens either in the long run.
I agree that while this plan has some benefits, there are some drawbacks as well. Like others have said with oil drilling, the Arctic National Wildlife Refuge was created to protect the endangered species there and help our environment. Opening it for oil drilling will only worsen the environment there, and we should be doing what we can to maintain natural serenity. I am in support of corporate taxes being reduced, although they definitely should not be reduced up to the point where they are lower than the poorer classes of America.
This version of the bill will result in a Republican Victory. As Justin pointed out, there are already some Republican senators like Bob Corker and Marco Rubio that have signed onto this bill.
Post a Comment