Home News Stories Tax cut bill in hand, GOP and Meadows tackle budget, immigration

Tax cut bill in hand, GOP and Meadows tackle budget, immigration

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Now, the GOP opens the mid-term election year with local U.S. Rep. Mark Meadows and others tackling immigration that both parties link to the budget bill. The impasse hardens, as the clock ticks ahead of the federal government shutdown deadline of Friday, Jan. 19.

While still juggling bills on several fronts, Meadows and colleague had a merrier Christmas than many forecast with a major legislative victory under their belts. The Tax Cuts and Jobs Act, the most sweeping tax reform in 30 years, was passed by both chambers last month. Pres. Donald Trump signed it into law on Dec. 22.

Analysts differ on the impact. One study projects 91 percent of earners who make $49,000 to $86,000 to pay $1,100 less, on average.

“We’re giving the American people their money back,” Rep. Meadows said. “The forgotten men and women of our country voted to elect President Trump and a Republican Congress to fix our broken tax code that taxes Americans too highly, and ships their jobs overseas” due to a steep corporate rate with a ceiling lowered from 35 to 21 percent. “We’re making the country more competitive for job creation and wage growth. We’re igniting the kind of economic growth that every American deserves.”

Stocks soared in the past year. Analysts attribute that in part to much federal business deregulation under Trump, which reversed Pres. Barack Obama’s actions. The Dow Jones Industrial Average of 30 bell-weather stocks in ‘17 rose 25.5 percent, and gained 5,000 points for the best yearly gain ever. That was more than double the gain of a year earlier, Obama’s last in office. The Dow surpassed a record 25,000 in this month, and closed Monday at 25,283. Nasdaq tech stocks soared 30 percent last year.

Stock holders include fixed-income retirees reliant on investments, and younger modest earners trying to build a nest egg. The jobless rate has dropped to near four percent.

Meadows, among others, prefers not to budge on the federal phasing out of DACA amnesty for those who illegally settled in the United States while minors. Democrats call those youths “dreamers” with many high-tech students; others see too many as aid-reliant, financial “drainers.”

DACA is a policy Obama began five years ago, to get around immigration laws. It stands for Deferred Action for Childhood Arrivals. DACA provides non-felons with renewable, two-year deferments from deportation, and eligibility for work visas. Last year, nearly one million illegals were enrolled in DACA with nearly half in California. Trump had DACA rescinded in September, giving to March before deportation begins.

Thus, GOP leaders say there is no urgency to decide about DACA within a budget bill. Democrats want DACA reinstalled without offering concession.

Meadows reluctantly opens the door for amnesty — but only in a swap for the Mexican border wall to a substantial-enough extent, beefing up border patrol against drug mules and others sneaking in, greater internal security funding, and two other demands to lessen future flow of illegal immigration. Meadows told Chuck Todd on MSNBC last week that “fundamental” immigration reduction is essential, or else “we’ll just be dealing with it again” with many more illegal aliens. “Let’s do something historic.”

Congressional Budget Office projections for both main projects are reportedly pricey — $26 billion to keep existing illegal youths here including aid benefits and more for future ones, and $18 billion for fully walling the entire border.

Many analysts foresee a compromise with the border secured in some areas and mostly with less-costly fencing, in exchange for the amnesty, with the GOP’s other two immigration demands up in the air.

One is curbing en masse “family chain migration” in which relatives sponsor each other, often settling in “refuge cities” in which mayors defy immigration laws, Meadows noted.

Another prickly issue is the “diversity lottery,” which Trump calls a “disaster.” It is for nations that send few emigrants to the U.S. Winning people get quick access into the U.S., on a green card visa. One such winner, Uzbek native Sayfullo Saipov, is the suspect in the Manhattan terrorist attack that killed eight people in November. Many others are from Iran. Trump tweeted Dec. 29 “we must protect our country, at all cost!”

The spending budget is most pressing, ahead of the newest deadline of Jan. 19. This renews the impasse that was delayed by a series of stop-gap measures from April on. It brings the two parties again to the brink of federal closings.

Republicans both spar and negotiate with their internal factions as well as Democrats, who have mostly unified to oppose GOP-led measures.

Meadows, chairman of the conservative House Freedom Caucus, has transformed himself from a rather rigid fighter on certain points to a unifier of his group and GOP moderates. He took the lead from stymied Speaker Paul Ryan on efforts at a health care bill last spring, reportedly with new Trump’s blessing, and has remained a key player on various issues often interviewed on national talk shows.

Meadow’s ascension as trigger man with Trump support mirrors Alabama Crimson Tide head coach Nick Saban changing quarterbacks at halftime Monday night, to win his fifth national title in nine seasons. Freshman backup Tua Tagovailoa threw three touchdowns in the 26-23 overtime victory over Georgia.

He was to rotate in the second half with usual starter Jalen Hurts, but he stayed hot and Saban stuck with him. Meadows has also improvised, in give-and-take policy talks with colleagues.

Republicans defied national media naysayers by finally passing a major bill after failing to for months — just as the Tide defied odds after a scoreless first half, to rally from 13 points down. Passing the tax law was like Alabama’s first score, to get back into the game. The GOP’s battle is for control of Congress and policy, after mid-term elections.

The pivotal play was Tua T’s Houdini-like escape on third down, to gain 10 yards (running 44 more sideways) for a first down to set up Bama’s first score. Politicians similarly have had to use evasive measures and persistence.

Passage of the tax bill after prior failures on health care, tax and budget bills was like gridiron twists of fate. Bama missed a last-second field goal, to win in regulation. Then in OT, down a field goal, Tagovailoa was sacked for a huge 16-yard loss back to the 41.

Yet on the next play, the lefty looked off a Bulldog safety from double-covering DeVonta Smith down the left side, then zipped the winning pass to the goal line.

Meanwhile, the tax law and new code are gaining fans, detractors, and tax preparer clients seeking clarifications.

Here are some details:

The tax rate drops for many such as from 15 to 12 percent for taxable incomes of $9,525-$38,700, and 25 to 22 percent for $38,700 to $82,500.

Fewer people are forced to pay the higher alternative minimum tax, by raising its kick-in levels.

A greater standard deduction benefits most, since an estimated two-thirds of federal taxpayers use it rather than itemize. A single filer living alone subtracts $1,600 more than before from taxable income. Before, such a taxpayer lopped off $10,400 — with a $6,350 standard deduction, plus $4,050 per-person personal exemption.

That amount rises by $1,600, with the standard deduction nearly doubling to $12,000. It is largely offset by the end of the personal exemption. This $12,000 is hailed as greater than many people’s potential itemized deductions.

Sadly, this is true for underemployed but not impoverished people whose medical expenses dropped. Reasons include they ceased cost-prohibitive coverage, sought less non-crisis care as it was out-of-pocket, and no longer faced the $695 tax fine for not being insured. Scrapping the fine ended the “Obamacare” mandate.

Unreimbursed business expenses can no longer be claimed. But dependent child credits double, to $2,000 each. Student loan interest reportedly remains. A single filer can still deduct up to $250,000 in capital gains from selling a primary home.

The wealthy are bruised some such as by allowing deduction on mortgage interest payments for homes valued up to $750,000, but no longer up to $1 million.

Stock investors take hits. The capital gains rate was not lowered. The “first in, first out” rule requires if a person adds to a stock position then sells some shares, they must count as earliest-bought ones. These are often steepest gains, since stocks crashed a decade ago but since rebounded. Selling stocks for money to live on artificially lifts one into a higher tax bracket.

Corporate tax savings is a debate epicenter, over its rates and results. Its top-end rate was slashed by 14 percent and indefinitely, unlike many individual benefits.

Lower rates are touted as a way to get companies that do business overseas to refrain from setting up a tax base abroad, to avoid higher U.S. rates. Extra-low, one-time “repatriation” rates beat other nation’s rates, and induce firms already tax-based abroad to repatriate back into the U.S. Uncle Sam thereby gets some rather no tax money from them.

When companies pay less tax, in theory they are apt to invest the savings into more facilities and jobs. Many doubt it. Yet small businesses are indicating they will expand, Paychex CEO Martin Mucci recently said on CNBC. Mucci said his surveys show half of owners of businesses employing fewer than 50 workers figure they will pay less in taxes and — of those — 80 percent will invest tax savings back into the business, and two-thirds will raise wages.

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