Confusion and chaos ahead as new tax rules take immediate effect

The most sweeping tax code overhaul in a generation will soon head to President Donald Trump’s desk — and Republicans are enjoying a victory dance.

Now comes the real-world turmoil.

America’s new tax system will go into effect in just 12 days, and payroll companies are bracing for confusion as they figure out new withholding rules that will affect millions of American paychecks.

The Treasury Department and the IRS will have to quickly write new regulations to implement the new law, governing everything from the tax regime for businesses that don’t organize as corporations to the endowments of the nation’s elite universities and how multinational corporations are taxed on the profits they make abroad.

And while the vast majority of taxpayers would see a tax cut next year, Americans who are considering selling real estate or other types of capital assets, paying property taxes, taking out a mortgage or incorporating Continue reading “Confusion and chaos ahead as new tax rules take immediate effect”

Trump’s signature would end 3-decade wait for tax reform

For the large contingent of Washington supply-siders and tax cutters, the sweeping tax overhaul that President Donald Trump is poised to sign into law this week has been a generation coming — and the culmination of half a life’s work that started during Ronald Reagan’s 1980s.

Grover Norquist, arguably the best-known anti-tax activist in the country, started Americans for Tax Reform at then-President Reagan’s request to help marshal support for the 1986 tax overhaul. He’s been working ever since to rally support for more tax cuts.

House Speaker Paul Ryan for years said his dream job was to be House Ways and Means chairman, a position that would have allowed him to quarterback the sort of tax revamp that his mentor, the late Jack Kemp, helped get through Congress in 1986.

When he became speaker, Ryan said he was reluctantly passing the title of Ways and Means chairman, and the Continue reading “Trump’s signature would end 3-decade wait for tax reform”

Trump’s signature would end 3-decade wait for tax reform

For the large contingent of Washington supply-siders and tax cutters, the sweeping tax overhaul that President Donald Trump is poised to sign into law this week has been a generation in coming — and the culmination of half a life’s work that started during Ronald Reagan’s 1980s.

Grover Norquist, arguably the best-known anti-tax activist in the country, started Americans for Tax Reform at then-President Reagan’s request to help marshal support for the 1986 tax overhaul. He’s been working ever since to rally support for more tax cuts.

House Speaker Paul Ryan (R-Wis.) for years said his dream job was to be House Ways and Means chairman, a position that would have allowed him to quarterback the sort of tax revamp that his mentor, the late Jack Kemp, helped get through Congress in 1986.

When he became Speaker, Ryan said he was reluctantly passing the title of Ways and Means Continue reading “Trump’s signature would end 3-decade wait for tax reform”

Jones’ win adds urgency to GOP tax push

Democrat Doug Jones’ victory in the Alabama Senate race will give Republicans extra urgency to get tax reform legislation to President Donald Trump by next week.

Tuesday’s shocker conceivably gives more leverage to potential holdouts like Sen. Susan Collins (R-Maine), and will lead to more calls from Democrats and progressive groups to slow down the process.

Donald Luskin, chief investment officer for Trend Macrolytics, said that Republican Roy Moore’s loss in Alabama will be a big incentive for Republican leaders to “drive the negotiations to a conclusion.”

“It makes more urgent the need for the GOP to exploit its 2018 electoral map advantage in the Senate — tax cuts are the perfect trophy to bring the voters, now without the stench of Moore’s sexual misconduct scandals," he wrote in an analysis for investors Tuesday night.

Senate Majority Leader Mitch McConnell said before the results rolled in Tuesday that Sen. Continue reading “Jones’ win adds urgency to GOP tax push”

Republicans strike compromise on mortgage interest deduction

House and Senate negotiators working on a compromise tax bill have agreed to cap the mortgage interest deduction at $750,000 for newly purchased properties, according to a GOP source.

That approach would split the difference between the tax bills that have passed the House and the Senate. The House proposal would only allow taxpayer to write off the interest on new mortgages of up to $500,000, while the Senate would keep the current policy of cutting off the deduction at $1 million.

The conference committee working on a final tax bill is scheduled to have its first meeting on Wednesday, but key GOP negotiators have said they hope to have a deal in place in the next day or two.

Republicans also need to come to a final decision on where to set the corporate tax rate, which both the House and Senate bills cut from 35 percent to 20 Continue reading “Republicans strike compromise on mortgage interest deduction”

Tax cuts alone won’t cover full cost of GOP plan, Treasury says

The Treasury Department said Monday that the GOP tax plan currently before Congress would need an assist from other Trump administration priorities to pay for itself.

Tax cuts alone aren’t enough, Treasury said in a one-page analysis, citing welfare reform and infrastructure spending as additional boosts to the economy.

The analysis assumes that an economy led by Republicans would boost revenues by $1.8 trillion over a decade — more than enough to pay for the roughly $1.5 trillion in tax cuts envisioned by Republicans.

Treasury Secretary Steven Mnuchin has been saying for months that his department would produce an analysis that proved the tax cuts would be fully paid for, and other top Republicans like Senate Majority Leader Mitch McConnell have insisted they have no doubt that would be the case.

The White House drew some criticism earlier this year for assuming that economic growth would hit close Continue reading “Tax cuts alone won’t cover full cost of GOP plan, Treasury says”

Senate Republicans race to lock down tax votes

Senate Republicans launched a frenzied round of last-minute deal-making on Tuesday to persuade key blocs of holdouts on their tax overhaul — and it’s far from clear leaders can satisfy the diverging concerns.

On the same day that President Donald Trump heads to Capitol Hill to rally the GOP troops, Republican senators were scrambling to negotiate changes to the tax legislation ahead of key committee and floor votes later this week.

Senate Majority Leader Mitch McConnell (R-Ky.), members of his leadership team, and key Senate Finance Committee Republicans were meeting Tuesday morning with Sen. Steve Daines (R-Mont.) to work out Daines’ concerns on the bill’s treatment of so-called pass-through businesses.

Another critical Republican swing vote — Sen. Susan Collins of Maine — laid out her asks in an interview with POLITICO Tuesday.

Collins, who doesn’t believe the GOP should have included the repeal of Obamacare’s individual mandate in Continue reading “Senate Republicans race to lock down tax votes”