Winners and losers under the US Senate tax proposal
The ultra-wealthy, especially those with dynastic businesses like President Donald Trump and his family do very well under a major Republican tax bill moving in the Senate, as they do under legislation passed this week by the House.
On the other hand, people living in high-tax states, who deduct their local property, income and sales taxes from what they owe Uncle Sam, could lose out from the complete or partial repeal of the deductions.
Some winners and losers:
- Wealthy individuals and their heirs win big. The hottest class-warfare debate around the tax overhaul legislation involves the inheritance tax on multimillion-dollar estates.
- Democrats wave the legislation's targeting of the tax as a red flag in the face of Republicans, as proof that they're out to benefit wealthy donors. The House bill initially doubles the limits to $11 million for individuals and $22 million for couples on how much money in the estate can be exempted from the inheritance tax, then repeals it entirely after 2023. The Senate version also doubles the limits but doesn't repeal the tax.
- Corporations win all around, with a tax rate slashed from 35 per cent to 20 per cent in both bills though they'd have to wait a year for it under the Senate measure. Trump and the administration view it as an untouchable centre piece of the legislation.
- US oil companies with foreign operations would pay reduced taxes under the Senate bill on their income from sales of oil and natural gas abroad.
- Beer, wine, and liquor producers would reap tax reductions under the Senate measure.
- Companies that provide management services like maintenance for aircraft get an updated win. The Senate bill clarifies that under current law, the management companies would be exempt from paying taxes on payments they receive from owners of private jets as well as from commercial airlines.
- An estimated 13 million Americans could lose health insurance coverage under the Senate bill, which would repeal the 'Obamacare' requirement that everyone in the US have health insurance.
- People living in high-tax states would be hit by repeal of federal deductions for state and local taxes under the Senate bill, and partial repeal under the House measure. That result of a compromise allows the deduction for up to $10,000 in property taxes.
- Many families making less than $30,000 a year would face tax increases starting in 2021 under the Senate bill, according to Congress' non-partisan Joint Committee on Taxation. By 2027, families earning less than $75,000 would see their tax bills rise while those making more would enjoy reductions, the analysts find.