Tax Cuts 2.0: What’s in the GOP Plan and Why It Matters

Lamar Ellis
September 13, 2018

People walk by the U.S. Capitol building in Washington, U.S., February 8, 2018.

House Republicans announced legislation Monday to permanently lock in last year's tax cuts, looking to remind voters of the surging economy - and the Republicans' role in getting it there - in the weeks before the November elections.

Republican Rep. Kevin Brady of Texas, who heads the tax-writing House Ways and Means Committee, is looking toward a vote on the legislation by the House this month.

Last year's tax overhaul set the individual changes to expire at the end of 2025 for budget reasons, since the bill was approved through a special process that allowed it to pass with a simple majority.

Americans for Tax Reform President Grover Norquist told FOX Business that the new round of tax cuts will allow middle-class Americans to save more tax-free for their day-to-day expenditures and retirement.

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In races for the US House of Representatives nationwide, American voters back Democratic candidates over Republicans by 52 to 38 per cent, the poll showed.

The only listed groups approving of the president are Republicans, 84 - 7 percent and white voters with no college degree, 51 - 40 percent. But the longer-term costs will run into the trillions - and that's on top of the $1.9 trillion cost of the 2017 tax law over the 10 years from 2018 through 2027 projected by the Congressional Budget Office. "Republicans gave Congress nearly a full decade to extend these individual tax cuts before they expire", notes The Washington Post's Jeff Stein, "but the law's mediocre polling numbers and the hard election outlook for House Republicans have increased their sense of urgency". All but one were from the high-tax Democratic states of New York, New Jersey, and California.

The measure also includes the controversial $10,000 annual cap for state and local tax deductions (SALT), a provision that's particularly unpopular in high-tax states like NY and New Jersey.

"Adding another several hundred billion dollars to the deficit is something that I think some Republicans are going to really think hard about", said John Gimigliano, who heads federal tax legislative and regulatory services at the audit, tax and advisory firm KPMG LLP. The new package would make the capped SALT deduction permanent.

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