People deserve to keep more of the money they earn, and this proposal is mostly consistent with that principle, at least through 2025, when the tax cuts would expire unless extended by Congress. These taxpayers, who tend to run LLCs, are happy to get relief from higher corporate rates.
The plan - which maintains the same number of income tax brackets as under current law but adjusts their parameters - cuts individual tax rates, including slashing the top rate for the highest earners from 39.6% to 37% and shifting the top bracket up slightly to income over $600,000 for people filing jointly or $500,000 for single filers. Though far from ideal, the GOP tax reform proposal is an important step in the right direction. For example, in a previous version of the GOP tax bill, graduate students were up in arms because tuition wavers were slated to be taxed.
The GOP did not, in the end, do much to simplify the tangled U.S. tax code.
Increases the standard deduction to $12,000 for individuals and $24,000 for married couples, indexed for inflation after 2018.
"For a lot of folks its going to be the Democrats who get the luxury - just as Republicans have had for awhile with President Obama - of just saying 'No, everything is bad.' And unfortunately that sort of fits the mood of the country", said McHenry.
The House Rules Committee voted on Monday evening to hold the House vote for the GOP tax bill on Tuesday afternoon, says Reuters. That approach is counter to sound fiscal governance and undermines the growth potential of tax reform, but that is what Republicans are delivering.
The bill, which represents the most heavy-handed tax overhaul in years, is expected to move through the Senate on Tuesday night and hit Donald Trump's desk by Wednesday. "It reinforces what people already intuitively believe about the Republican Party and that is that their first priority is taking care of the wealthiest, of taking care of the corporations even at the expense of working-class and middle-class Americans".
Susan Collins (R-Maine), who was one of the nails in the coffin of the Republicans' Obamacare repeal attempts, is voting for tax reform, despite its inclusion of Obamacare-gutting provisions. Originally Corker said he wouldn't vote for a bill that would impact the deficit so severely.
Where can you watch the GOP tax bill vote live?
What comes after the GOP tax bill vote?
Passing the bill in December, with many provision set to take effect January 1, 2018, leaves employers and employees little time to figure out how to adjust take-home pay under the new bill and it remains unclear how long it will take the Internal Revenue Service and payroll professionals to figure out how to adjust withholdings under the new law.