I hear you, I hear you, muttering, “That’s done and over and I don’t want to read anything more about.”
You do. And thanks to two people — Congresswoman Suzan DelBene (Dem, WA) and me — you will want to read what follows. (You can reserve your thanks to me; all I’ve done is type the whole thing out, but stand and cheer Ms. DelBene because she’s the one with the brains and guts to do what she did in the House, during the so-called debate over the tax bill.)
Oh and you can also thank The Washington Spectator from which I copied Ms. DelBene’s interrogation of Thomas Barthold, Chief of Staff for Congress’s Joint Committee on Taxation. I’m not copying her resonant, powerful speech to Congress — in which she quoted Oliver Wendell Holmes’s famous “Taxes are what we pay for civilization” — because her Q&A about what the tax bill would do has the precision of a deadly chef’s knife.
Rep. DelBene: A few questions. Will a teacher in my district who buys pens, pencils, paper for his students be able to deduct these costs from his tax returns under this plan?
Barthold: HR 1 will repeal the above-the line deductions for teacher expenses.
Rep. DelBene: Will a corporation that buys pens, pencils, paper for its workers be able to deduct those costs from its tax returns under this plan?
Barthold:The general deduction for ordinary and necessary business expenses by any business entity is not changed, so it need not be a corporation.
Rep. DelBene: So they would.
Rep. DelBene: Will a firefighter in my district be able to deduct the state and local sales taxes that she pays from her tax returns under this plan?
Barthold: As noted previously, the itemized deduction for the election of either state or local income taxes would be repealed under HR 1.
Rep. DelBene: And will a corporation be able to deduct sales taxes on business purchases under this plan?
Barthold: Sales taxes incurred as part of the production of income will remain deductible.
Rep. DelBene: So they would. …Would a home owner in my district be able to deduct more than $10,000 in property taxes under this plan?
Barthold: Real estate taxes under HR 1 would be capped at $10,000, itemized deduction.
Rep. DelBene: Will a corporation be able to deduct more than $10,000 in property taxes under the plan?
Barthold: Again, under the same rule I was describing, as ordinary and necessary business expenses, the taxes attributable to earning income would be deductible, so the short answer is yes.
Rep DelBene: And if a worker in my district had to move because his employer is forcing him to relocate his family or potentially lose his job, can he deduct his moving expenses under this plan?
Barthold: The above-the-line deduction is also repealed.
Rep. DelBene: He would not be able to.
Rep. DelBene: But if a corporation decides to close its facilities in my district, fire its workers, and move its operation to China, say, can it deduct associated moving expenses under this plan or, stated another way, can a corporation under this plan deduct outsourcing expenses incurred in relocating a U.S. business outside of the United States?
Barthold: Outside the United States, or within the United States, those would be deductible expenses.