Perhaps legislators will reduce the proposal’s $1.7 trillion/10-year increase in the federal deficit by grabbing onto the idea of taxing as individual income all the need-based and merit-based grants offered by colleges and universities to their students! That has to have some good revenue-generating potential.
Latest USA Today article on some less discussed proposed changes:
https://www.usatoday.com/story/news/politics/2017/11/04/15-things-republican-tax-bills-fine-print-could-affect-you/829075001/
It’s a proposed new tax plan, nothing is definite yet.
@greenwitch Thanks for the link. If NYT is to be trusted, the new plan is not necessarily a giveaway to big business. Just as I thought, eliminating corporate deductions doesn’t cover lowering the tax to 20%. We will have to read in more detail if they have done enough to tax corporations. Shall we hold off condemning the new tax based on “a huge give away to corporations”?
I totally agree with @tom1944
If you think about it that is more democratic. Everyone gets the same benefit whether you are an individual or belong to an organization who can swing on your benefit. Otherwise, it takes away individual power to give to a group, an organization, a corporation, etc. I don’t see how anyone could not accept that.
Lobbying Frenzy Begins on Tax Bill
https://www.nytimes.com/2017/11/03/us/politics/republicans-tax-cut-obamacare-mandate-trump.html
Commercial Real Estate, Which Fueled Trump’s Fortune, Fares Well in Tax Plan
https://www.nytimes.com/2017/11/03/us/politics/commercial-real-estate-trump-tax-package.html
If https://www.nytimes.com/interactive/2017/09/27/us/politics/six-charts-to-explain-the-republican-tax-plan.html referencing https://taxfoundation.org/lower-corporate-tax-rate-think-outside-box/ is true, then the removal of the specified deductions and credits could be accompanied by a lowering of the corporate tax rate to 28.5% (not 20%) to make it a revenue neutral exchange instead of a deficit increasing giveaway.
Every income band for MFJ gets a lower marginal rate except for those making 260k-416,700k, we would go from 33% to 35% and lose a bunch of deductions.
My small (one person) professional services company gets taxed via pass through at my personal rate. Since I don’t make gobs of money at it, as far as I can tell I’m not seeing a tax cut – those seem to be reserved for people who were raking in a lot more than I am – but this part of the new law is confusing (and I’m pretty sure they are going to find a way to stick it to me somehow). So be careful about painting all professional services with the same brush. 
I meant at the State level in sales tax.
To me pass through income should be taxed at the same rate as other income
That isn’t what the new law says, though. Some portion of it will be taxed @ 25% – which for people who have been in a higher bracket is a break. But I was at 25% before.
The new proposed bill reduces the top tax rate for pass-through income from 39.6% to 25%, but only for that which is attributable to passive capital investment. Pass through income attributable to labor does not get this benefit. Note that professional service businesses like physician, lawyer, dentist, accountant, etc. will be assumed to be 100% labor, so they do not get this benefit. Many other situations assume 30% capital (which will benefit from the lower rate) and 70% labor (which will not).
https://taxfoundation.org/pass-through-anti-abuse-rules-tax-cuts-jobs-act/
Thanks for that link @ucbalumnus - I emailed it to myself at my work email. Maybe I can impress my bosses (I work for a CPA firm that is set up as a pass through - I’m sure they well be thrilled to find they are excluded from this beneficial treatment)
One note on the business tax side of things: The one big plus of lowering the overall business tax percentage is that it lowers the barrier to entry. That is, what we’ve had is high-tax for new and small companies, and a good chunk lower for companies that could afford the armies of tax lawyers and lobbyists to whittle their tax bills down.
Of course, what they’re planning on doing—dropping the percentage while keeping much of the existing tax breaks—still provides an advantage to the big companies, but at least it drops the barrier to the smaller ones.
(Doesn’t make me like it, but I figured I ought to mention the meager positives I see.)
Yeah, there is that, but… Lowering barrier to entry could have been done without letting fat cats line their pockets… 
OK, why do they have to cut the medical deductions and the adoption credit? What’s the argument for that?
“Simplification” I guess. But it’s cruel.
Always about the cats, Bunsen. But what about the big dogs? I think they take precedence over those fat cats. 
Honestly, I don’t think this is going to pass. Too many problems. I haven’t talked to anyone who likes it, and people want to get reelected.
I don’t think it is simplification at all. They have to pay for at least a portion of the cuts for business somewhere. And the cuts are going to be in things that benefit individuals. Simplification is just a work to hide behind.
They are nickle and diming everywhere. Like I said earlier, they specifically eliminated a tax break on small businesses that make their work places more accessible to those with disabilities.
How many of those do you think are honestly claimed a year?
Yep they have to pay for permanent corporate rate cuts and they have literally left no stone unturned. If a bill passes that is anything remotely close to what is proposed middle income folks are going to be in for a rude awakening.