The election of a new president creates the anticipation of major tax changes. While tax law changes, were initially identified during President Donald Trump’s campaign, under discussion are possible revisions to the September 27, 2017 Tax Reform Framework by the House Ways and Means Committee and several competing proposals by key Republicans.
The House passage today 216-212 of the $4 Trillian US Budget, approved by the Senate last week, is not the Prposed Tax Plan. To understand the process, keep in mind that the fine tuning has not occurred – and what is fine tuning to Congress can mean major changes to taxpayers. The Senate Finance Committee has not had its say, and it tends to be the “polishing agent” with final say in the Joint Conference Committee. Approval will likely follow party lines, 51-49 in the Senate, which means that all changes will likely have a 10-year expiration date, to avoid the Byrd Rule requiring support of 60 senators to avoid a filibuster. In addition, expect that the tax reductions will increase the U.S. budget deficit greater than anything seen during the prior 8-year. Estimates range from 1.5 to 10 trillion. Republican Senator Bob Corker opposition to deficit spending and a history of advocating balanced budget notwithstanding, including the Republican Platform in 2017, and the 2012-year proposed Balanced Budget Amendment, in practice, the party has the record of greater give-away and economic overheating of business cycles to garner votes and short-term gain.
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