In the wake of the GOP’s victories in last month’s midterm elections, Republican lawmakers are newly empowered to work on overhauling the nation’s byzantine tax system.
1. Cheaper medical devices
Incoming Senate Majority Leader Mitch McConnell and top Republicans have been clear: They want the Medical Device Tax to go.
The Medical Device Tax was included in Obamacare to pay for its expansion of health care coverage. Medical supply manufacturers benefited from the added business from the law, but they want to get rid of the tax. It imposes a 2.3 percent sales tax on all kinds of medical devices, including everything from CT scanners to replacement joints and even to hypodermic needles.
2. Lower rates
If there’s one thing that post-George H.W. Bush Republicans stand for, it’s lower tax rates.
Ryan’s goal, as stated in his past budgets, is to reduce tax rates for individuals and businesses to 25 percent. Currently, those rates are 39.6 percent and 35 percent, respectively.
3. More expensive mortgages
One of the tax preferences likely to be on the chopping block when Republicans move to lower rates is the deduction for mortgage interest payments.
The mortgage interest deduction is one of the biggest and most claimed tax breaks in the code, accounting for $93 billion in foregone revenues in 2013, according to the JCT. Although it’s also one of the most popular breaks, would-be tax reformers likely would have to face the prospect of limiting it.
4. Higher tax bills, if you live in a blue state
The likeliest losers in a GOP reform effort would be higher earners in high-tax, high-spending blue states.
People in those states claim the greatest deductions of state and local taxes. Those deductions are highly likely to be in GOP crosshairs during a tax-reform effort.
5. Bigger breaks for having more kids
If Sens. Mike Lee of Utah and Marco Rubio of Florida have their way, families would see serious tax savings for having more kids.
The two reform-minded senators have proposed boosting the Child Tax Credit from $1,000 to $2,500, applicable to both income and payroll taxes. In Lee’s original version of the plan, the credit would cover children through the age of 16, making it worth up to $40,000 per child.
6. Simpler tax returns
“Americans should be able to do their taxes on 2 sheets of paper,” House Speaker John Boehner tweeted in October.
Republicans want to shorten the tax code and simplify its provisions, reducing the need for regular people to worry about whether they understand their own tax returns.
The average American taxpayer spends 13 hours managing and filing his taxes, according to the Internal Revenue Service.
Read the full article at the Washington Examiner.