Some details:
Chairman Kevin Brady (R-TX) released a series of bills which have been dubbed “Tax Reform 2.0.” These bills modify and build upon the Tax Cuts and Jobs Act passed in December, whose individual provisions are currently set to expire at the end of 2025.
The first bill, the Protecting Family and Small Business Tax Cuts Act of 2018 (H.R. 6760), includes several key changes to the individual income tax:
Tax Rates: The bill would make the tax rate changes from the Tax Cuts and Jobs Act permanent.
Key Deductions: The bill would make the $10,000 cap to the state and local taxes paid deduction and the lower mortgage interest deduction permanent. It would also make permanent changes to miscellaneous individual income tax deductions.
Standard Deduction and Child Tax Credit: The expanded standard deduction and child tax credit would become permanent, as would eliminating the personal exemption.
Medical Expense Deduction: Additionally, it would extend the newly-expanded medical expense deduction. The Tax Cuts and Jobs Act expanded the medical expense deduction eligibility limit from 10 percent of adjusted gross income to 7.5 percent for tax years 2017 and 2018. This bill would extend that through the 2020 tax year, allowing more individuals to deduct their medical expenses.
Pass-Through Businesses: The Section 199A deduction would be made permanent.
The second bill is the Family Savings Act of 2018 (H.R. 6757). This bill would make two large changes. First, it includes a number of reforms to retirement accounts, similar to those from the Retirement Enhancement and Savings Act of 2018. Second, it would create small universal savings accounts. Individuals would be able to contribute up to $2,500 into the accounts on an annual basis, with any withdrawals being tax free.
The third bill, the American Innovation Act of 2018 (H.R. 6756), would allow businesses to deduct their start-up costs. Firms could deduct the lesser of their start-up expenses or $20,000. The $20,000 amount would be reduced for firms with more than $120,000 in expenses. Expenses that could not be deducted immediately would be amortized over 180 months.
This tax bill actually raised the taxes of millions of middle class Americans.
Corporations (including enemies of conservatives like Facebook and Google) made out like bandits, receiving a tax rate cut from 35 percent to 21 percent, while many individuals in the middle class got screwed.
Thank you for breaking that down.