Published: Mon, September 17, 2018
Worldwide | By Gretchen Simon

Tax Cuts 2.0: What’s in the GOP Plan and Why It Matters

Tax Cuts 2.0: What’s in the GOP Plan and Why It Matters

Several Republican House members, facing tough re-election fights in high-tax, Democratic-leaning states like NY and New Jersey, voted against the tax legislation past year and would prefer to do without this new version as well.

Republicans say the legislation will also seek to encourage start-up businesses by allowing them to write off more start-up costs and add investors without limiting tax benefits, such as research and development credits.

The SALT cap had made unveiling the Tax Reform 2.0 legislation a little complicated for Republicans.

Despite reports surfacing last week that House Republicans were having second thoughts about pushing a second round of tax cuts this month, they must have said, "Screw it, let's do it anyway".

While the law slashed the corporate tax rate permanently from 35 percent to 21 percent, its tax cuts for individuals and the millions of US "pass-through" businesses expire in eight years.

The new tax law enacted in December provides steep tax cuts for corporations and the wealthiest Americans, and more modest reductions for middle- and low-income individuals and families.

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To the dismay of party leaders, the healthy economy and Trump have become countervailing forces.

A committee-level vote is being planned by the House tax committee Chairman Kevin Brady on Thursday, Sept. 13.

"Last year we said goodbye to America's old, broken tax code", Brady said.

American voters also believe by a wide-margin, 55 - 28 percent, anonymous allegations that senior aides to President Trump work behind his back to keep him from making what the aides believe are bad decisions. "A simple question every GOP candidate should have to answer: How come we can't afford cost of living raises for middle-class public employees, but we can afford trillions in new tax cuts for millionaires?" he tweeted.

"Despite the difficulty of the map's geography, if there's a big wave I think our odds are very, very good", Senator Chuck Schumer, the Democratic leader, said in an interview, adding that when "you're feeling the wave in September it rarely changes much by November".

Trump is touting the positive impact of tax cuts on jobs and the economy as he campaigns for Republicans ahead of the 2018 midterm elections. Obama, who saw GDP growth of just over 1 percent, doubted that Trump could achieve 4 percent expansion. "I opened up our lovely economic engine with Regulation and Tax Cuts".

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