Political Crossfire Forums

I'm a little weirded out by the blueprint they released.

xhttps://www.nytimes.com/2017/11/02/us/ ... 0005531476

Why did they keep the affordable housing package in there? Are they hoping to use that as a bargaining chip with the Dems? I'm totally opposed to it...I think it's monumentally dumb.

And....I see no elimination of deductions on the corporate side. Is that still to come? How else do they plan on controlling the deficit here? I don't see any cost control in this...especially if you're already compromising on SALT (up to $10,000) and on the mortgage interest deduction (up to $500,000 on new homes). Upping the child tax credit by $600 (doesn't seem like much) and keeping the EITC. Are they seriously going to lower the corporate rate without eliminating corporate deductions? They allow all capital investments to be expensed at once...which does seem like front loading to me (efficacy be damned - this just seems to be pulling investment forward).

I mean...if I get a $1,500 tax break and the corporations go from paying a statutory rate of 35% to 20% and an effective rate of 12% you better believe that gap in the deficit is going to be larger than projected.

I know this has a long way to go but damn...they've been working on this for months?

Supposedly Paul Ryan asked Trump to name this bill, and he is insisting it is called "The Cut Cut Cut Act."

Well it's not really SALT they're preserving it's just the LT up to $10K.

But it does seem that the 401(k) stuff isn't going to change.

Not sure how they're going to say this is paid for.

As far as the corporate tax deductions, the only one that needs to go imo is the qualified production activities deduction as it's a fake (as in no cash paid for it) deduction. The expensing off of equipment vs depreciation is a short term timing problem and corps are going to have to ask themselves if it's better to write off the whole thing with a 20% rate or depreciate them and potentially get more tax savings if/when corporates go back up.

See section 5103:

They're placing an excise tax on private colleges and universities investment income.

https://www.vox.com/2017/11/2/16596110/ ... -bill-read

Don't have time now but here's the official legislation:

https://www.vox.com/2017/11/2/16596110/ ... -bill-read

I guess my last thought before work is...will this negatively affect the US housing stock further? Homebuilders will have less of a reason to continue expanding as an incentive to homeownership is taken away - probably less likely to attract capital anyways. Multi-family unit construction will go up but rents could continue to rise in the interim.

I know the NAHB is worried about this (they said this could cause a recession in the housing market) but I think that'd only be true in certain markets. Demand is sky high right now and a lot of that has to do with supply.

Older article from earlier this year but it highlights my point:

http://www.latimes.com/business/la-fi-h ... story.html

Honestly this bill doesn't seem to simplify enough. It's already carving out exceptions for certain deductions, attempts to control for pass through abuse by adding qualifiers, adds in a tax on universities private investments, etc.

I was listening to Rush Limbaugh on the way in....conservative commentators are very taken with it either. He specifically cited this:

https://www.politico.com/agenda/story/2 ... ket-000570

The House Bill contains a provision with a surcharge on $1 Millionaire's income over $1 Million @ 6%.

Just a guess here...but they were desperate to close the funding gap and came up with this.