Is there Anything to Like in the New Tax Law?

In the wee hours , the U.S. Senate passed a tax bill. It still needs to be reconciled with the significant differences in the House’s version before it goes back for a full vote of Congress, but this bill in some form seems likely to become law.

It seems the sort of dog’s breakfast you would expect to come out of this Congress. And there’s plenty to roll your eyes about.

But partisan critics, in their hypereagerness to find fault, have inadvertently highlighted one of the plan’s best features: that it unsustainably increases federal government debt by cutting tax revenue without corresponding spending cuts. Depending on whose numbers you trust, the bill may eventually add $1 trillion or more to the national debt. If you want to see the federal government’s power and ambition curbed, you should be pleased to see it further hobbled in this way.

Does the bill offer anything to those of us who are trying to resist federal income taxes by keeping our incomes low? It’s still too early to say for sure, as nobody seems to know all of the ramifications of the bill, and it isn’t finalized yet (even the basic income tax rates — how many there are and at what taxable income levels they apply — are very different between the House and Senate versions).

The bill would substantially increase the standard deduction, but would also eliminate the personal exemption, so this is almost a wash (this also has the effect of making itemized deductions less attractive). It eliminates (or may eliminiate) some credits and deductions (e.g. for education, medical expenses), but increases the child tax credit. There are some attractive provisions for business owners, including “pass-through” businesses, which may make self-employment yet more useful for tax resisters.

But as I said, it’s too early to say much definitive yet. I’ll keep my eye on the news and on useful commentary (there’s a whole lot of unuseful commentary to sift through at the moment) and I’ll summarize anything interesting I learn here.