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National Govt & Politics
Tax Reform 2017 vs Tax Reform 1986 - some major differences and similarities
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Tax Reform 2017 vs Tax Reform 1986 - some major differences and similarities

Tax Reform 2017 vs Tax Reform 1986 - some major differences and similarities
Photo Credit: Jamie Dupree

Tax Reform 2017 vs Tax Reform 1986 - some major differences and similarities

As Republicans in the Congress begin their push for sweeping tax reforms, with the House Ways and Means Committee starting committee work on Monday afternoon, those who were around on Capitol Hill when the Congress approved the landmark 1986 Tax Reform Act can quickly point out a number of obvious differences between the 2017 and 1986 efforts - and detect some familiar echoes of the 1986 debate as well.

Here's some of the ways that things are different - and similar - in the 1986 and 2017 versions of tax reform:

1. If 1986 tax reform was the tortoise, then 2017 is a hare. The Tax Reform Act of 1986 took more than just 1986. It started with a nationwide address from President Reagan in May of 1985, which was followed by an actual bill from the White House, then months of hearings on specific tax considerations by committees in both the House and Senate. It took the House three months to go from draft bill to a vote on the floor in late 1985. It took the Senate almost 6 months to get a bill done in 1986. Then there were several months of intense bargaining between the House and Senate to get a final bill in October 1986 to the President's desk. In 2017, the GOP is all about speed.  Republicans kept the bill a secret until just last week. Now, they want to go from a draft bill (unveiled on November 1) to a bill signing ceremony at the White House (by Christmas) in about seven weeks.  President Trump says he wants a bill on his desk this year. Seven weeks versus 13 months.  That would be a major departure from the extensive, and lengthy tax debate in 1986.

2. Partisan 2017 versus bipartisan 1986. The setup was different in 1986. Democrats controlled the House, while the GOP was in charge of the Senate and White House. Democrats took the lead on the House bill, but needed the intervention of President Reagan to convince some Republicans to help it get through the House when the bill initially derailed in early December of 1985. After more near-death experiences in the Senate, the vote on the Senate bill was 97-3. You read that right. In the end, 292 House members voted for the final tax reform bill, along with 74 Senators. President Trump can only dream about numbers like that. It is possible that he could win over a few Democrats in the House and Senate, but the numbers will be very small, as maybe a handful of Blue Dog Democrats in the House (there aren't many left) will join up, and maybe a couple of Red State Democrats in the Senate could vote 'yes.' But right now, this is not the 1986 tax bill.

3. 2017 is definitely not my father's 1986 tax bill. Back in 1986, my father was part of "Gucci Gulch," the army of tax lobbyists who waited outside the House Ways and Means Committee, and the Senate Finance Committee, as the Tax Reform Act was put together. He did enough leg work - as others did - to secure the addition of a number of special interest provisions in that bill. "Special rule for Financial Corporation," was the hidden title about one of the provisions that he was able to secure - and it wasn't the only one. If you go through that 1986 law, you see all sorts of mentions of companies incorporated in Delaware, or examples like a company that has a "principal office in New Brunswick, New Jersey, or had "5 3/8 percent Swiss franc bonds due in 1994," or had "executive offices in Philadelphia, Pennsylvania" - all of those were "rifle shot" provisions dealing with one business. So far, the 2017 tax reform effort is not filled with those items. So far.

4. State and local tax deduction - a familiar fight. Back in 1986, the initial idea was to use tax reform to get rid of the state and local tax deduction, as Republicans are trying to do in 2017. But the effort proved too politically toxic 31 years ago. So far, the provision is still in the bill, as it accounts for a big chunk of money that would go to offset the cost of tax cuts in other parts of the GOP plan - but the move is raising opposition among GOP lawmakers in higher tax states like New York and New Jersey. "It's a geographical redistribution of wealth," said Rep. Lee Zeldin (R-NY), one of a group of eastern Republicans who have been trying to negotiate an agreement with GOP leaders on how to deal with new limits on the state and local tax deduction. One other notable similarity - back in 1986, Gov. Mario Cuomo (D-NY) lined up against the idea of getting rid of that state and local write-off. His son is now doing the same in 2017.

5. Echoes of Trump in opposition to 2017 tax bill. It isn't hard to go back and find scorching criticism of the 1986 tax law from - businessman Donald Trump. "This tax act was just an absolute catastrophe for the country, for the real estate industry," Mr. Trump said at a November 1991 hearing. Fast forward to 2017, and there are business groups who say this GOP tax plan could harm the real estate industry and cause economic troubles as well. "We have always said that tax reform – a worthy endeavor – should first do no harm to homeowners. This tax framework misses that goal," said the head of the National Association of Realtors last week, worried about limits on the mortgage interest deduction, changes in how long you can own a house before getting a capital gains exclusion after a sale, and more. Go back and watch Mr. Trump's congressional testimony, and think about how some of those issues could ricochet into 2017.

You can read the current version of the GOP bill here.

More changes to the GOP bill are expected this week.

Read More

News

  • In addition to computers, phones, software and other tech products, Apple has announced it will soon offer its own credit card: the Apple Card. >> Read more trending news  The tech giant introduced Apple Card, created in partnership with Mastercard and Goldman Sachs, at its “show time” services event Monday, in Cupertino, California, The Verge reported. Apple CEO Tim Cook touted Apple Card as, “the most significant change in the credit card experience in 50 years.' Apple Card will be available on all iOS devices in the Wallet app and is set for release this summer. Customers who want a physical card can get an optional “laser-etched titanium rectangle,” CNN reported. Unlike traditional credit cards, Apple Card comes with no card number, CVV security code or expiration date. Purchases are instead authenticated with a fingerprint or face-identification. The new card will also offer a rewards system known as Daily Cash, in which 2 percent of any Apple Pay purchase goes directly back to the Apple wallet as cash. The deposits are made daily, and the reward goes up to 3 percent for purchases of Apple products and down to 1 percent for purchases made with the physical card, according to CNN. Apple said the card has no late fees or increased interest rates for late payments, but The Verge noted, “We’ll read the fine details to see if there are limits.” Some speculate Apple Card is meant to encourage use of Apple Pay, which Cook said Monday is only accepted by 70 percent of U.S. retailers, as opposed to 99 percent of retailers in Australia. “They’re really nudging consumers toward using Apple Pay on a regular basis and not just as an occasional thing when a retailer allows,” Sara Rathner, a credit card expert at personal finance company NerdWallet, told The Verge. More information on Apple Card can be found here.
  • The price of vaping in Washington could soon skyrocket if a proposed 60 percent tax is passed by lawmakers. >> Read more trending news  'It's like being told, ‘We're going to put a new tax on your favorite pizza.’ No! Don't do that!” said Jim Music. Washington lawmakers introduced HB 1873. It would add a 60 percent tax to vapor products, which is similar to tobacco, KIRO-TV reported. Currently vape isn’t taxed. Vapor store owner Joshua Baba said vape is different than tobacco and the price hike would force many shops to close their doors. 'Sixty percent, we owe that to the state just all of a sudden? That's crazy. That does put me out of business,” he said. Standing in the rain, Monday afternoon a small group held signs and gathered to protest. “Those kind of numbers are scary to somebody. I go through a couple bottles of vapor juice a week and that's going to double my cost,” said Music. A new Washington State Health Youth survey shows e-cigarettes and vaping are on the rise. Thirty percent of high school seniors said they use vapor products, which is up from 20 percent in 2016. State Rep. Gerry Pollet proposed the House bill. He wants to see the numbers drop and believes a tax is the ticket. “E-cigarettes and vaping products are dirt cheap, you won't believe how cheap they are,' he said. “A pack of cigarettes in the state of Washington, on average, costs about a little more than $8. Vaping the same amount of nicotine will cost you about $2.' Lawmakers believe the tax will drop youth vaping by 25 percent. Others find that hard to believe.  “This tax isn't going to change where the kids are getting it or how they're getting it, but it is going to change, in a negative way, the lives of a lot of shop owners and a lot of product users that are fully in compliance with the law,” said Music. Pollet said the 60 percent tax would eventually raise as much $30 million per year. The money would be used to fund programs that work to prevent teens from vaping.
  • A Monday morning British Airways flight scheduled to fly from London, England, to Dusseldorf, Germany, accidentally went to Edinburgh, Scotland, instead. >> Read more trending news  The error has been attributed to an incorrect flight plan filed by WDL Aviation, which operated the flight on behalf of British Airways, USA Today reported. This led the pilot and cabin crew to believe the flight was bound for Edinburgh. Air traffic controllers followed the same flight plan and saw nothing amiss, British Airways officials told The Associated Press. Zsófia Szabó, a passenger on the flight, told CNN she noticed something may have been amiss when she saw mountains outside the cabin window instead of the “usual German landscape.” A coworker brought up Google Maps on their phone, she said, and noted the plane was in Scotland. 'When we landed there was a bit of a hilarious moment when the flight attendant asked for a show of hands for the people going to Dusseldorf, which turned out to be everyone,' Szabó said. The pilot apologized to passengers, then announced the plane would refuel and head to Dusseldorf. Most passengers didn’t seem mad about the situation and instead found it funny, Szabó said. Why an incorrect flight path was filed remains unclear. 'We are working with WDL Aviation, who operated this flight on behalf of British Airways, to establish why the incorrect flight plan was filed. We have apologized to customers for this interruption to their journey and will deal with them all individually. Customers are on route to Dusseldorf currently,” British Airways spokesman Chip Garner said in a statement. WDL Aviation said they’re also investigating the incident: “We are working closely with the authorities to investigate how the obviously unfortunate mix-up of flight schedules could occur,' said WDL spokesperson Joachim Schöttes. “At no time has the safety of passengers been compromised. We flew the passengers on the flight with number BA3271 to Dusseldorf after the involuntary stopover in Edinburgh.” The Associated Press contributed to this report.
  • In a move that has surprised some, mixed martial arts fighter Conor “The Notorious” McGregor has announced his retirement from the sport via Twitter. >> Read more trending news  “Hey guys quick announcement,” McGregor tweeted late Monday. “I’ve decided to retire from the sport formally known as ‘Mixed Martial Art’ today. I wish all my old colleagues well going forward in competition. I now join my former partners on this venture, already in retirement. Proper Pina Coladas on me fellas!” The 30-year-old fighter, originally from Dublin, Ireland, is a two division UFC world champion and two division Cage Warriors World Champion. He’s ranked No. 2 lightweight champion and No. 9 pound for pound champion in the UFC, according to Fox Sports. Yahoo Sports reported the announcement came as a surprise, and that McGregor may “just be trying to get an upper hand in a negotiation.” McGregor appeared Monday on The Tonight Show with Jimmy Fallon and made no mention of retiring, MMA Fighting reported. He talked of fighting this summer. “We’re in talks for July,” McGregor told Fallon. “So we’ll see what happens. A lot of politics going on. The fight game is a mad game. But again, like I said, and to my fans, I am in shape and I am ready.” Some fans on Twitter seemed unconvinced of the news. “Last time he said this he fought twice in the next 6 months,” tweeted @BishopSportsNet. UFC hasn’t yet commented on McGregor’s announcement.
  • Now that the Gronk's officially hanging up his cleats -- fans are left wondering what he'll do next. >> Read more trending news  Patriots tight end Rob Gronkowski announced on Instagram that he is retiring from football following the team's Super Bowl LIII win, ending his historic nine-year NFL career, Boston 25 News reported. What he'll do after is up in the air, though some say he might go down the wrestling road. In fact, he has dabbled in it before with an appearance at WrestleMania 33 -- stepping in the ring to help his real-life friend Mojo Rawley during the Andre The Giant Memorial Battle Royal. And many fans were hoping to see Gronk at TD Garden on Monday night, where WWE Raw was taking place. He did not make an appearance, but fans in Boston are excited to see what he'll take on next regardless a cameo at the Garden.  'Oh yeah he’s an entertainer,' said Patriots fan, Josh Lima. 'He’s funny, you know he’s either gonna be an actor or wrestler.' Public relations executive and Emerson professor, David Gerzof Richard, thinks Gronk sure has the personality and brand for it in his post-NFL career. 'He has his own brand of being the happy-go-lucky tight end, it's really leveraging that and with various people he is interacting with on both Instagram and Twitter and leveraging into what comes next,' said Richard.  Richard says sports stars in previous decades didn't have the social media star power -- or social media at all -- to build off of like Gronk. 'The worst thing he could do is go silent... and that is something I don't think we are going to see from Rob Gronkowski,' adds Richard. And his fans certainly hope he'll find a way to stay successful in the public eye. 'I think he should go into movies because he's a pretty funny guy and people look up to him,' said Patriots fan, Donte Tyler from Stoughton. Another fan thinks so too, and she thinks comedy would be the only way to go.  'I don't know about a serious ... maybe in a comedy or something,' another fan said. 'What would it be called? Maybe Adam Sandler and Gronk go on vacation.' As for the wresting, a WWE spokesperson gave no comment on any potential deals or announcements.
  • A metro Atlanta family said an airline crew told their two sons they’d have to get off a plane after a dispute over one of the boys’ severe peanut allergies, WSB-TV reported. >> Read more trending news  The boys were traveling from Atlanta to Manila, where their father is based on a temporary job, according to the news station. Rakesh Patel said his 15-year-old and 16-year-old sons were traveling by themselves after visiting their sick grandfather. The family told WSB-TV they let Delta Air Lines know ahead of time that the teen had a peanut allergy. Delta made sure that on the first leg of the flight, from Atlanta to Seoul, no peanuts were served, WSB reported.  However, things were different on the second leg of their flight. When the boys went to board their flight from Seoul to Manila on Delta’s skyteam partner Korean Air, the boys were told there would be peanuts served on board, the news station reported.  According to the family, the crew said they were not going to deprive other guests of peanuts and presented the teens with two options: deal with the peanuts or get off the flight.  When the son with allergies asked for another option, the boys were forcibly removed from the plane and stranded in Seoul, their father confirmed. They took a return flight to Atlanta, the family told WSB. Patel said he filed a complaint with the airline and asked for a refund.  In a statement, Delta apologized to the Patel family for the ordeal, “particularly during what is already a difficult time for them.”  “Delta and our partner Korean Air are communicating with the family and examining the processes surrounding this incident; we will use our findings in our work to create a consistent experience for customers flying Delta and our partner airlines,” the statement said. >> Trending: Giant alligator sneaks up on golfers, lumbers across links, plops down near 17th hole  A statement from Korean Air read, in part: “Korean Air is aware that peanut and food allergies are an industry issue and no airline can guarantee a food allergy-free environment. But we are reviewing ways to deal with this issue in a safe and feasible way. We totally understand the risks faced by passengers with nut and food allergies and will certainly try to accommodate them better in the future.”