House and Senate lawmakers released the final tax cut bill, the Tax Cuts and Jobs Act, late Friday and are expected to vote on it early next week.
Andy Friedman of The Washington Update told ThinkAdvisor on Friday that “it seems they have straddled the contentious issues and found reasonable compromises. The important thing, from the administration’s viewpoint, is they kept virtually the entire corporate cut and made sure it starts next year.”
A full copy of the final bill, which includes 1,097 pages, is available here.
Friedman, a former tax attorney and now public-affairs consultant, explained that “regardless of how the bill is being sold, … this is intended primarily as a tax cut for corporations.”
Businesses, he continued, “receive over two times the benefit that individuals get under the bill (measured by government lost revenue). This balance reflects the Trump administration’s belief that permitting businesses to keep more of their funds will grow the economy, which ultimately will benefit individuals through greater employment and higher wages.”
The permanent rate reduction on “C corporations from 35% to 21% is expected to consume virtually the full $1.5 trillion revenue loss permitted under the bill,” Friedman continued.
“Accordingly, all of the other provisions in the bill must be revenue neutral in the aggregate: every dollar of revenue lost must be offset by a dollar of revenue gained. And the individual benefits must sunset after a period of years,” he explained. “An individual taxpayer thus might end up paying less tax, more tax, or the same tax depending on how the gainers and losers apply to his or her situation.”