Details Released on GOP Tax Plan – And Political Landmines

Republican lawmakers today released details of their tax cut on Thursday.
President Trump was hoping for historic tax reform.

Instead it is a mixed bag.

The Dow dropped 80 points in early trading as the tax plan was released. Investors were expecting more from Republicans. They forgot Paul Ryan is Speaker.

The Wall Street Journal published details of the plan.

Here’s a breakdown of how the tax bill handles some deductions and credits:

STANDARD DEDUCTION

Current law for 2017: $12,700 (married); $9,350 (head of household); $6,350 (single)
Proposed for 2018: $24,400 (married); $18,300 (head of household); $12,200 (single)

PERSONAL EXEMPTION

Current law for 2017: $4,050
Proposed: Repealed

CHILD TAX CREDIT

Current law: $1,000
Proposed: $1,600 plus $300 each for the taxpayer, a spouse and any non-child dependents

STATE AND LOCAL TAXES

Current law: Itemized deduction
Proposed: Deduction capped at $10,000 for property tax only

CHARITABLE DONATIONS

Current law: Itemized deduction
Proposed: Unchanged

MORTGAGE INTEREST DEDUCTION

Current law: Itemized deduction on loans up to $1 million
Proposed: Itemized deduction for loans up to $500,000 on new home purchases

ALTERNATIVE MINIMUM TAX

Current law: Parallel tax that disallows personal exemptions and state deductions

Proposed: Repealed

RETIREMENT ACCOUNTS

Current law: 401(k) plans allow pretax deferral of up to $18,000
Proposed: Minor changes

And the Wall Street Journal also released the Political Landmines from the plan.

It’s hard to understand why Republicans thought it was a good idea to cut deductions for medical expenses for the critically ill or tax credits for student-loan interest. They really must want to lose the next election. The GOP plan also repeals tax credits for adoption which seems illogical for the pro-Life party.

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