December 2,2017
the staff of the Ridgewood blog
Ridgewood NJ, last night Republicans pushed a nearly $1.5 trillion tax bill through the Senate after a burst of eleventh-hour horse trading, giving President Donald Trump one of his top priorities by Christmas.
Peter Ferrara, a senior fellow at the Heartland Institute, writes in The Daily Caller that 2017’s tax overhaul bill will be comparable to landmark tax legislation passed under President John F. Kennedy in the 1960s and President Ronald Reagan in the 1980s. “Presidents Kennedy and Reagan fundamentally fixed the individual, worker side of the tax code,” Ferrara writes. “This year’s tax reform now focuses on the business side, where the real economic problem lies today.” The lessons from the Reagan-era tax debate are particularly instructive today. “The economy took off on a 25 year boom,” Ferrara says. “Despite those dramatic income tax rate cuts, federal revenues doubled while Reagan was president, because of the booming growth.”
Like the House bill, the Senate bill cuts the current 35 percent rate to 20 percent, but the Senate bill calls for a one-year delay in dropping the rate, cutting the USA’s uncompetitive highest corporate taxes in the world and seen as the key to job growth .
For small business a provisions for “pass-through” businesses shaped up to be one of the greater fights among lawmakers in the tax reform debate.
A pass-through business refers to one that is not a corporation, and therefore isn’t taxed as such. These include sole proprietorships, joint ventures, limited liability companies and S corporations. Millions of American businesses use the pass-through taxation format, where the profits are counted in the owners’ personal tax returns.
The Senate measure would set a new deduction of 17.4 percent for those who qualify for the pass-through taxation. It also makes it easier for taxpayers to obtain this deduction. However, it includes a clause that would sunset this deduction
On the other hand, the House plan would reduce the tax from 39.6 percent to 25 percent. At odds here is which plan provides a greater savings for a greater number of pass-through businesses.
The Senate bill would drop the highest personal income tax rate from 39.6 percent to 38.5 percent. The estate tax levied on a few thousand of the nation’s largest inheritances would be narrowed to affect even fewer.
Deductions for state and local income taxes a big issues in high tax New Jersey and particularly Bergen County , moving expenses and other items would vanish, the standard deduction used by most Americans would nearly double to $12,000 for individuals and $24,000 for couples, and the per-child tax credit would grow.
People would be allowed to deduct up to $10,000 in property taxes another killer in high tax Bergen County .
Bergen County Executive Jim Tedesco , “This legislation is bad for Bergen County, bad for New Jersey, and bad for our country. New Jersey residents already far pay more in taxes to the federal government than we receive in federal funding. Rather than attempting to create more fairness for middle class New Jersey families, this bill eliminates the state and local tax deduction, asking us to contribute more to subsidize tax cuts for the very wealthiest Americans and their heirs. Within our state, Bergen County will be among the hardest hit, and families and small businesses throughout our 70 communities will be hurt by this legislation. It would undermine the strength of our regional economy. I strongly urge New Jersey’s Congressional delegation to unanimously oppose this legislation and work with their colleagues to prevent it from being signed into law.”
Tedesco’s plea clearly a sign that state and county tax collection will be hurt .
The bill would abolish the “Obamacare” requirement that most people buy health coverage or face tax penalties a big plus for lower and middle class working people who’s Obamacare premiums make little economic sense .
The House will vote on a motion to go to conference on the tax bills on Monday evening. The Senate is expected to vote on a similar measure soon after. Congress is scheduled to adjourn for its Christmas break on Dec. 15, but House Speaker Paul Ryan has said he will keep the House in session beyond that date if necessary to get tax reform passed.
The changes will not have any impact on your taxes for 2017, which are due to the IRS by April 17, 2018 (you get an extra 48 hours to file because the traditional April 15 due date falls on a Sunday).
Well, as long as I stay here , I sure ain’t goin to the shops and restaurants in the CBD. Lookin at the recipes in the NYT today. Mighty good and healthy. Fixin to shop at Macy’s after Christmas sales. And usin the library even more instead of buyin books at Bookends. Signed, a Ridgewood senior.
“…your taxes for 2017, which are due to the IRS by April 17, 2018 (you get an extra 48 hours to file because the traditional April 15 due date falls on a Sunday).”
Final sentence in this post is partly correct. April 15 is a Sunday, and tax day can never be on a Saturday, Sunday, or legal holiday.
So why aren’t taxes due on Monday? The reason the deadline skips another day is an April 16 holiday that most people haven’t even heard of: Emancipation Day. It’s a big deal in DC, where (because it’s a legal holiday) IRS offices are closed for the occasion; thus, no taxes are due. They are so determined to get their day off that when April 16 falls on a Saturday, the celebration is pushed back to Friday and when it falls on a Sunday, it’s pushed forward to Monday. This frequently alters the tax deadline.
https://publicholidays.us/emancipation-day/
“The Compensated Emancipation Act freed over 3,000 slaves in the District of Columbia. Nine months later, Lincoln signed the Emancipation Proclamation that freed over three million slaves across a large number of states.
“Compensated Emancipation put money into the hands of the slaveholders. Slavery was abolished in the District and the government paid nine hundred slaveholders approximately $300 for each slave they had previously owned. The act only covered the District of Columbia because Lincoln was unable to convince many of the states of its virtues. The federal government only had control of the District and that was where slavery began its end.
“Emancipation Day celebrates the freedom of slaves, and particularly President Lincoln’s efforts, and eventual success, to end slavery. The holiday celebration was recognized from 1866 to 1901 then was somehow forgotten. In recent years, after many years research by a lady named Loretta Carter-Hanes, the holiday was ‘rediscovered’ and re-established.
“On Emancipation Day in D.C., Pennsylvania Avenue comes alive with a parade of military, students and bands, followed by a fun-filled festival. Public school children have the day off and many government offices are closed so the parade draws large crowds along its route. At the end of the day and after the festival, the sky comes alight with a fireworks show.”
This year the same day will be Patriots Day, which celebrates the battles of Lexington and Concord in Massachusetts and Maine. It is celebrated on the third Monday in April and often shifts the tax deadline forward for residents of those two states. In 2019, Patriots Day will fall on Monday, April 15, enabling residents of MA and ME to spend their holiday evening finishing their taxes and submit them on April 16. But this year everybody gets until April 17 because of Emancipation Day.
https://publicholidays.us/patriots-day/
“Patriots’ Day commemorates the battles of Lexington and Concord in 1775. The stirrings of these battles stemmed from a need for independence, and also from an event in 1773 known as the Boston Tea Party where colonists revolted against the high tax on tea levied by the British Government. Colonists, many apparently in Mohawk disguise, crept aboard three trade ships in Boston Harbor and threw 342 tea chests into the water.
“It was believed that a man named Samuel Adams had instigated this crime. By 1775, tensions were high concerning independence from British rule, and the tea incident – a social and economic crime – and the British red coats approached Lexington in an attempt to arrest Adams and a man named John Hancock who was also working towards ending British rule in the colonies.
“Paul Revere, a hero in the revolution, alerted the colonists and this helped Adams and Hancock avoid capture. The British attacked Lexington first and forced the colonist militia back then marched to Concord searching for supply posts. The patriots had been warned well in advance and had moved their supplies to safe locations.
“At North Bridge near Concord, the British troops that numbered around 100, were defeated by the militia of 400 men who hid in the hills around the bridge. The battle at Concord was of great significance because it marked the start of the American War of Independence between the British army and the thirteen states that were a part of the British colony.
“This state holiday should not be confused with Patriot Day, which is held on 11 September each year to commemorate the 2001 terrorist attack known by many as ‘9/11’.”