What you may have missed in the GOP's new tax bill
Popular tax deductions are on the chopping block in GOP's new proposal.
— -- The House Republican tax bill is more than 400 pages, with changes to the country’s tax code both big and small, impacting both the wealthy and the poor.
On Friday, House Ways and Means Chairman Kevin Brady, R-Texas, released a so-called “Chairman’s mark,” a substitute amendment, which replaces the bill first introduced Thursday with new text including “technical changes and additional modifications,” according to Brady.
It’s this version of legislative text that will be amended beginning Monday. Republicans claim their bill would produce a $1,182 tax cut for a family of four earning the country’s median income. But what else is in the Tax Cuts and Jobs Act?
The proposal would allow religious organizations to make political campaign statements “in the ordinary course of religious services and activities” and remain tax exempt. Conservative proponents argue the tax rule infringes on their First Amendment rights, but critics say it violates the separation of church and state. Churches still won’t be able to make donations, but could endorse candidates in the "content of any homily, sermon, teaching, dialectic, or other presentation made during religious services or gatherings."
The National Football League, which has become a frequent target of President Donald Trump’s Twitter tirades, is even indirectly targeted for its tax-exempt bonds for professional stadiums. Going forward, those bonds would not be tax-exempt.
If the bill becomes law, unborn children “at any stage of development” could become a designated beneficiary, paving the way for parents to begin setting aside money for their unborn child’s education from the moment of conception.
The legislation would also eradicate tax breaks for folks who purchase a plug-in electric vehicle.
Democrats say that the elimination of the medical expense deduction is one of many poison pills, as are provisions to limit the mortgage interest deduction, end the casualty loss deduction, and preclude taxpayers from deducting moving expenses to take a new job.
The bill would also eliminate the adoption credit which enables taxpayers to claim a credit of $13,570 per eligible child and cut the deduction for dependent care assistance.
The legislation also would eliminate the student loan interest deduction and prohibits future contributions to Coverdell education savings accounts, where contributions and withdrawals are currently both tax-free.
If an employer reimburses employees for continuing education tuition expenses, that tax-exempt income would become taxable under the GOP plan, raising an individual’s taxable income by as much as $5250.
Teachers would no longer be allowed to write off the cost of school supplies they purchase for their classroom, drawing criticism from Democrats. “To cut education is really dumb,” House Minority Leader Nancy Pelosi, D-Calif., told reporters Friday, decrying the “meanness of it all.”
“What is it in this bill that people should know more about?” Pelosi wondered. “It's really making suckers of the American people.”
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