Creating a Rising Tide of Support
Tuesday March 20, 2018
Senate Tax Cuts and Jobs Act
On November 9, the Senate Finance Committee released its version of the Tax Cuts and Jobs Act. The Senate Finance Committee press release stated the bill would provide "fiscally responsible middle-class tax relief by cutting tax rates across the board, reducing the tax burden on American job creators and modernizing our tax system."
The Senate Finance Committee release summarized the main provisions of their comprehensive tax bill.
Ways and Means Committee Passes Tax Bill
On November 9, the House Ways and Means Committee passed the Tax Cuts and Jobs Act (H.R. 1). The bill is expected to be presented to the full House of Representatives for a vote next week.
House Ways and Means Committee Chairman Kevin Brady (R-TX) stated, "Today, the first and oldest Committee in Congress passed transformational tax reform legislation that charts a new course for the country. We reaffirmed for all of the families and main street businesses struggling to get by that relief is on the way - relief from a broken tax code, from a slow-growing economy, from stagnant wages and from jobs fleeing overseas."
The Ways and Means Committee Ranking Member is Richard Neal (D-MA). He opposed the bill and noted, "I believe the bill before us today is a bad deal for millions of Americans, particularly those in the middle class. The legislation, which was crafted solely by the majority party behind closed doors and which was not made public until late last week, puts the wealthy and well-connected first, while forcing millions of American families to watch as their taxes go up. That is simply not what the American people asked us to do and it is not something that the Democrats on this committee can support."
The White House welcomed the passage of the bill by the Ways and Means Committee. Treasury Secretary Steven Mnuchin supported the bill and noted, "The Tax Cuts and Jobs Act released last week by the House Ways and Means Committee is a critical first step to a stronger economy that benefits all Americans. Lackluster growth below 2% has sometimes been referred to as the new normal. I want to assure you that this will never be normal for me, for President Trump or for the American people. President Trump is committed to moving forward on economic policies that will create sustained growth of 3% or higher - that is what the people deserve."
Editor's Note: There still is a major question of whether this bill can receive a favorable vote by the House of Representatives. Several Republican members from New York, New Jersey, California and Illinois are expected to oppose the bill because it eliminates the state and local income tax deduction. Speaker Ryan (R-WI) and Chairman Brady will be attempting to build a majority vote in favor of the bill.
House and Senate Tax Bill Differences
Even if both the House and Senate pass their respective versions of the Tax Cuts and Jobs Act in December 2017 or January 2018, there will be a Conference Committee to agree on a final bill.
The bills currently have many differences.
Applicable Federal Rate of 2.4% for November -- Rev. Rul. 2017-21; 2017-46 IRB 1 (17 Oct 2017)
The IRS has announced the Applicable Federal Rate (AFR) for November of 2017. The AFR under Section 7520 for the month of November will be 2.4%. The rates for October of 2.2% or September of 2.4% also may be used. The highest AFR is beneficial for charitable deductions of remainder interests. The lowest AFR is best for lead trusts and life estate reserved agreements. With a gift annuity, if the annuitant desires greater tax-free payments the lowest AFR is preferable. During 2017, pooled income funds in existence less than three tax years must use a 1.2% deemed rate of return. Federal rates are available by clicking here.
Published November 10, 2017