Tax Cuts Expiring is Really Weird

[Axaday]

I just did a quick check to see if Trump has done anything on the promise to cut taxes on overtime. Because you know what? It isn't really good for the country, but it would be good for me and I'd like to find a silver lining in here somewhere. Apparently he hasn't said anything about it since inauguration, but people still think it might get built into a tax bill this year.

I ran into a nugget that wasn't a surprise, we hear about it now and then, but it hit me differently. Part of the complication of the tax bill this year is that Trump tax bill from the first term is expiring this year. It was written, I guess, to just cover his 2 terms assuming immediate reelection. It just strikes me as strange that the tax law would be written in such a way that there would be a default position for it and you would write a bill that would change it for a while and then revert when it expires. I GUESS they do that because they need to to get all of the votes? It makes it more palatable to some people in the middle?

It just seems like if you made a law to change the tax code, now that would be the tax code until you change it again.

 

[The Mighty Mollusk]

As written, if he'd served two straight terms, the Republicans would've pulled their usual trick of playing up the negatives of a new tax change while also obstructing any actual work on it and blaming Democrats/Liberals/DEI/whatever other scapegoat for doing Bad Things. They didn't count on losing in 2020.

 

[Patch]

Has to do with how they passed it - the budget reconciliation technique which allows them to pass it through the Senate with just 50 votes instead of 60.

Congressional Republicans’ coming war on poor people

What we know about GOP reconciliation plans

www.slowboring.com

The key thing here is that the Congressional Budget Office scores legislation for its budgetary impact over a ten-year window. But to pass muster under reconciliation rules, a bill cannot raise the long-term budget deficit. When Republicans were putting the Tax Cuts and Jobs Act together, the way they did this was to first raise a certain amount of revenue by closing tax loopholes — capping the SALT deduction, for example. They then wrote a bunch of tax cuts, the cost of which on a year-to-year basis was a lot more than the revenue they raised by cutting loopholes. But then, they scheduled a bunch of those tax cuts to expire — specifically, to expire this year — so that the bill scored as reducing rather than raising the long-term deficit.