Tax cuts favored for middle class, small business

At press time, House and Senate had passed competing versions of a large tax reform bill and were working in a conference committee to iron out the many differences. While agreement on a framework for reconciliation had been reported, details were as yet scant. Broad priorities were named over preceding weeks by owner-operators in Overdrive‘s audience, as illustrated by the poll below.

A repeal of the Affordable Care Act’s individual mandate to purchase health insurance was included in the Senate version of Republicans’ tax-reform package to reduce the amount of money the tax legislation would add to the federal deficit. The logic is that without the requirement to purchase insurance, fewer would, thus the federal government would save money on subsidizing premiums for low-income insurance purchasers. Nearly 1 in 5 readers named that provision as their top priority for the entire package.

As debate continued, readers answered the question, illustrated by the poll here, as to their top priority for tax reform. Most owner-operators’ taxes pass through their individual returns, and results from the poll in part reflect that reality. More respondents favored middle- and lower-class individual income tax reductions.

So-called pass-through businesses will be receiving some form of relief. The House’s version includes a generally lower rate for pass-through business income determined by a complicated formula. The Senate provided for a deduction for pass-through filers making less than $250,000 in income annually ($500,000 for couples filing jointly). The framework for reconciliation of the two bills, reportedly, seemed to settle on the Senate’s method of reducing pass-through businesses’ taxes with a 20 percent deduction.

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Again, though, the details of the measure are likely to be complex, in contrast to a respondent who weighed in among those in the “Other” column. Dale Downer wants tax reform to yield simplicity more than anything else. “It should be so simple, we should be able to file on a postcard. The elimination of the IRS should be a top priority!”