This week was filled with milestones as Congress passed the most comprehensive tax overhaul in decades and averted a government shutdown with a funding bill right before the holidays. Below are the highlights of the events MMG was watching this week.
Tax Bill Passes Congress
The first comprehensive tax reform bill in nearly 30 years passed Congress this week, with all but 12 House Republicans voting in favor of the bill. All Senate Republicans voted for it as well, although Sen. John McCain was not present, having returned home to Arizona for health reasons. Favorable results were achieved for much of ACG’s membership, including the preservation of the corporate interest deduction (which was to be fully repealed in the original GOP blueprint for tax reform). Ultimately, interest deductibility was limited to 30 percent of EBITDA.
Highlights are below. For a more comprehensive breakdown of the bill, read our recent article summing up the provisions.
- A 21% corporate tax rate.
- A 20% deduction for qualified pass-through income.
- Full expensing of capital expenditures.
- Limitation of interest deductibility to 30% of EBITDA.
- Transition to a territorial tax system.
- Lowering the tax rate and threshold amounts.
- Doubling the standard deduction.
- Limiting the state and local tax deduction.
- Limiting the mortgage interest deduction.
- Doubling the child tax credit.
Continuing Resolution Passed, Funding Government Through Jan. 19
Extending government funding and staving off a shutdown, Congress passed a funding bill Thursday that’s essential to tax reform as well, Politico reports. Included in the spending package is a PayGo waiver for the tax reform bill, allowing President Trump to sign the bill into law. In addition, the continuing resolution:
- Extends federal funding for all government programs through Jan. 19, 2018.
- Extends funding for the Children’s Health Insurance Plan (CHIP) through March.
- Reauthorizes FISA, the Federal Intelligence Surveillance Act.
- Extends Veterans Choice Program funding.
- Provides the Department of Defense with extra funding to repair damage to two naval ships and missile defense activities.
- Provides funding for several public health programs.
When the continuing resolution runs out on Jan. 19, GOP leadership will have to grapple with Democratic demands for the Deferred Action for Childhood Arrivals, or DACA, program, among other things.
That’s all for now, folks…
Congress is now out of session, returning in January—and your author is too! Wishing you all the best holidays, and here’s to the end of an utterly fascinating year.
Ben Marsico works on public policy issues for ACG.