What ’s in the Republican Economic Tax Package?

Adam N. MichelWays and Means Committee Republicans recently introduced theAmerican Families and Jobs Act, an economic tax package that addresses significant ongoing tax increases on domestic investment built into the 2017Tax Cuts and Jobs Act. Most of the Republicans ’ major proposed changes in theAmericanFamilies and Jobs Act expire after 2025, worsening current tax uncertainty and obscuring the necessary reforms ’ fiscal cost.Other than permanence, theAmerican Families and Jobs Act could be significantly improved by adding Universal Savings Accounts for family savings flexibility and neutral cost recovery for currently excluded building investments. The proposed legislation includes a  series of other reforms, many that are good and a few that are misguided.The package is comprised of three bills: theTax Cuts for Working Families Act (H.R. 3936), theSmall Business Jobs Act (H.R. 3937), and theBuild It in America Act (H.R. 3938). Here is a  brief summary of the most important provisions.Expensing. The central pro ‐​growth component of the package is the extension of full business expensing for R&D, equipment, and machinery. As I  recently explained in a Cato brief, the normal tax rules require businesses to deduct their investment spending over time (between 3  and 39 years). Especially during times of high inflation, such as the current economic climate, these rules increase the after‐​tax cost of new investments because the value of the associated ta...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs