There is no chance of it being acted on this Congress, but House Ways and Means Chairman Dave Camp on Wednesday will unveil “draft legislation” to overhaul the nation’s tax code, proposing major changes for both individuals and businesses.
Camp’s proposals would lower the corporate tax rate from 35 percent to 25 percent, and for top individual earners from 39.6 percent to 25 percent. But his plan goes much wider.
It includes a cap on new home mortgage interest deductions at $500,000, repeal of the state and local tax deduction, reductions in the earned income tax credit for low-wage earners, and conversion of certain 401(k) accounts to Roth IRA-like accounts.
According to those with knowledge of the plan, there would be basically two rates on individuals — down from the current seven brackets: 10 percent for those below roughly $75,000 and 25 percent for those above that level of annual income.
A 10 percent “surtax” would apply to earnings above $450,000 for joint filers. And for this purpose, the surtax would not apply to certain domestic manufacturing income, but the base would include municipal bond interest and employer-provided health insurance premiums.
Also, the standard deduction and the child tax credit would phase out on incomes above $300,000 on joint returns.
There also would be a 40 percent exclusion for capital gains and dividend income — meaning a maximum rate on those categories of 15 percent.
Camp’s plan calls for repeal of the individual alternative minimum tax as well.
On the corporate side, the reduction from 35 percent to 25 percent would be phased in over five years by 2 percent a year.
The draft bill would also eliminate the Modified Accelerated Cost Recovery System (MACRS is the current tax depreciation system in the United States) and lengthen certain lives for new assets.
The bill would require amortization rather than expensing of certain research and experimentation expenses, and advertising expenses. For instance, advertising is now treated as an ordinary, fully deductible business expense in the year it is incurred. Camp’s plan calls for allowing businesses to deduct only 50 percent, and requires that the balance be amortized over some number of years.
Democrats on Tuesday had not seen the full plan, but have already been questioning how Camp would pay for all of the changes. Some revenue-raisers are included. It would require big U.S. banks and insurance companies to pay a quarterly 3.5 basis-point tax on assets over $500 billion — raising $86.4 billion over the next decade.
But Democrats have characterized another move — the expansion of the Roth IRA — as a “gimmick” that they say could raise a lot of money now but cost a lot of money in the future.
“We’re going to be requesting a 20- to 30-year Congressional Budget Office score,” one senior Democratic aide said late last week.
And even before Camp has unveiled his tax package — scheduled to occur at a Capitol news conference at 1:30 p.m. Wednesday — Republican and Democratic leaders in the Senate are shooting down the possibility of getting significant legislation through this year.
Both Majority Leader Harry Reid and Minority Leader Mitch McConnell blamed one another Tuesday for holding the legislation up. “The truth is we should have tackled tax reform years ago,” Reid said. “It would be extremely difficult with the obstruction we get here from the Republicans on virtually everything.”
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Before we get to the specifics of this exposé about escorts working the Iowa and New Hampshire primary crowds, let’s get three things out of the way: 1.) It’s from Cosmopolitan; 2.) most of the women quoted use fake (if colorful) names; and 3.) again, it’s from Cosmopolitan. That said, here’s what we learned:
- Business was booming: one escort who says she typically gets two inquiries a weekend got 15 requests in the pre-primary weekend.
- Their primary season clientele is a bit older than normal—”40s through mid-60s, compared with mostly twentysomething regulars” and “they’ve clearly done this before.”
- They seemed more nervous than other clients, because “the stakes are higher when you’re working for a possible future president” but “all practiced impeccable manners.”
- One escort “typically enjoy[s] the company of Democrats more, just because I feel like our views line up a lot more.”
No matter where you stand on mandating companies to include a backdoor in encryption technologies, it doesn’t make sense to allow that decision to be made on a state level. “The problem with state-level legislation of this nature is that it manages to be both wildly impractical and entirely unenforceable,” writes Brian Barrett at Wired. There is a solution to this problem. “California Congressman Ted Lieu has introduced the ‘Ensuring National Constitutional Rights for Your Private Telecommunications Act of 2016,’ which we’ll call ENCRYPT. It’s a short, straightforward bill with a simple aim: to preempt states from attempting to implement their own anti-encryption policies at a state level.”
Much has been made of David Brooks’s recent New York Times column, in which confesses to missing already the civility and humanity of Barack Obama, compared to who might take his place. In NewYorker.com, Jeffrey Frank reminds us how critical such attributes are to foreign policy. “It’s hard to imagine Kennedy so casually referring to the leader of Russia as a gangster or a thug. For that matter, it’s hard to imagine any president comparing the Russian leader to Hitler [as] Hillary Clinton did at a private fund-raiser. … Kennedy, who always worried that miscalculation could lead to war, paid close attention to the language of diplomacy.”
The New Covenant. The Third Way. The Democratic Leadership Council style. Call it what you will, but whatever centrist triangulation Bill Clinton embraced in 1992, Hillary Clinton wants no part of it in 2016. Writing for Bloomberg, Sasha Issenberg and Margaret Talev explore how Hillary’s campaign has “diverged pointedly” from what made Bill so successful: “For Hillary to survive, Clintonism had to die.” Bill’s positions in 1992—from capital punishment to free trade—“represented a carefully calibrated diversion from the liberal orthodoxy of the previous decade.” But in New Hampshire, Hillary “worked to juggle nostalgia for past Clinton primary campaigns in the state with the fact that the Bill of 1992 or the Hillary of 2008 would likely be a marginal figure within today’s Democratic politics.”
At first, “it was pleasant” to see Trevor Noah “smiling away and deeply dimpling in the Stewart seat, the seat that had lately grown gray hairs,” writes The Atlantic‘s James Parker in assessing the new host of the once-indispensable Daily Show. But where Jon Stewart was a heavyweight, Noah is “a very able lightweight, [who] needs time too. But he won’t get any. As a culture, we’re not about to nurture this talent, to give it room to grow. Our patience was exhausted long ago, by some other guy. We’re going to pass judgment and move on. There’s a reason Simon Cowell is so rich. Impress us today or get thee hence. So it comes to this: It’s now or never, Trevor.”