Running list of Senate Tax Reform Anomalies and Special Interest handouts

I’m just going to read the 479 pages and pick out anything unusual.  I’ll present it here in a running list over a short period of time….maybe 3 or 4 days.  I might reformat it-depending on how it comes together 🙂

It looks like there could be 50 pages just dealing with foreign corporations and subsidies.  This would ostensibly deal with repatriation.  It would take a tax expert analyzing these pages side by side with existing code to make heads or tails of these parts.  Not me.:)

There are tons and tons of amendments and special considerations for and about Life Insurance…I mean tons.  I don’t know what this fixation is all about.  The net affect would seem to harm Insurers themselves, similarly to the House Bill.  There is probably 70 total pages concerning Life Insurance, how it’s transferred, accounted for, Employee-Employer specifics…all kinds of crap.

We can assume who some of the lobbyists were that did the amending of Republican legislation in the wee hours on Dec 1st through some of these passages.  I’m not cutting out entire sections, because well…then you might as well read the whole thing yourself.  Just highlights so you get the drift.

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It’s worth noting that Democrat Jeff Merkley found a special provision for a small college in Michigan tied to Secretary of Education Betsy Devos in the 2 hours given to everyone to look at the legislation.  He demanded a motion to have it struck from the bill.  If he hadn’t noticed it, that special provision, exclusively for her pet college, would still be in there.

I’m working from the last page to the first.  Might have to double back at some point.

  1. The first one you heard about.  No taxation for maintenance and upkeep of aircraft.  This section sits alone at pages 330-332,  between Alaska native settlement trusts and Opportunity Zone Development.  Totally unrelated to any overview of transportation or equipment specific maintenance.  It’s just bizarrely, blatantly sitting there for no reason whatsoever…aside from the fact we must assume one of the lobbyist represents a rich CEO who doesn’t like paying taxes on the upkeep of his personal jet.

 

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2. Well defined tax deductions for importers of alcohol and large domestic manufacturers.  Beer, wine, and distilled alcohols are all included.  Page 295-318.  That’s 23 pages of meticulous tax cuts for multinational distributors and large domestic manufacturers.  Why?  Hell if I know.  I’m sure it will come up at some point.  Some digging around might shed light on this.

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3.  Repeal of deductions that college boosters have been using to universities via buying expensive stadium seats for sporting events.  Where you stand on this, is arguable as it is clearly being used as a loophole to max out contributions.  When viewed as the administration’s overall effort to damage education, it’s questionable to me.  It is estimated this could reduce donations by 20%-30%, which for some colleges could be unsustainable.   Page 294.

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4. An added excise tax aimed specifically at highly invested private universities.  No clear reason for this aside from it being a money grab from well-to-do schools.  Page 289.

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5. Repeal of Tax exempt status of State and municipal bonds often used for infrastructure projects which includes State run school financing.  Very strange as the Administration is supposedly pro-infrastructure spending.  Page 253.

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6. Limit tax credit for research into drugs for rare diseases, apparently cutting the credit in half.  The House bill seeks to eliminate this credit altogether.  Page 200.

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7.  I’m going to go ahead and add this one…because it’s interesting, to say the least.  Page 188.

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8. removal of deduction for experimental research for within the taxable year it happens.  It can be amortized over a period of years.  Page 140.

 

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EXCEPT- in the case of digging for coal, oil, or gas.  You can still deduct that upfront.

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9. Expanding the amount that can be deducted for Luxury automobile ownership by 400%.  Page 131.

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10. Elimination of the Individual mandate. The effects of which is widely written about.   This would be devastating to our nation’s health care systems and existing individual’s premiums  both short term and long term.  Page 94.

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11. A 100% Increase In Estate Gift Tax and Exemption.  If you’re super rich, this is a great way to help maintain family wealth.  Page 88.

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12. Suspension of deduction for moving expenses.  Disallowed until 2026.  So if you feel persecuted for living in a high tax state, like New York, you’re going to have to hold out on moving to Alabama for a spell.  Simmer down.  page 87.

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13. Suspension of deduction for commuting on a damn bicycle.  had no idea this even existed, but since it’s a good idea, of course this is also suspended until 2026.  page 86.

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14. Modification of the ability to not declare capital gains on the sale of primary residence…thus avoiding those taxes.  For a primary residence, you would have to own the residence for 8 years as opposed to the current 5 years AND you would have to reside there for 5 years as opposed to the current 2 years before you could avoid the capital gains penalty.  Again…until 2026.  For some reason we are being discouraged from moving until 2026 in this legislation.  Can’t imagine home builders or realtors are happy with any of this.  Page 84.

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15. Suspension of itemized deductions. Page 83.

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16. Repeal of ability to deduct losses from a natural disaster except to the extent it is declared a federal disaster.  “To the extent”  must imply some kind of prorated numbers according to how bad the Federal government thinks the disaster is.  At any rate, this means undeclared disasters, or just statewide disasters aren’t  deductible.  So if you’re in a high-tax, disaster prone state like California,  I think you’re pretty much given the middle finger at this point.  page 83.

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17. Suspension of deduction for home equity interest.  Page 82.

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18. Suspension of State and Local tax deductions. We know about.  page 81.

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19. Just so you know, an entire section was written for special treatment of religious education and was X out by hand.  Page 70-74.

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20.  Now this one I’m just going to put here, because it’s super strange.  If a military person is operating in the Sinai Peninsula under hazardous conditions it shall be treated as if they are operating in a war zone…for tax reasons.  Let’s just remember we saw this one.  page 55.

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21.  Increase in Child tax credit.  Which is nice. Page 46.

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