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What you need to know now that the GOP tax bill is going to be law

President Trump and congressional Republicans took a victory lap on Wednesday after scoring their first sweeping legislative win by passing their tax code overhaul into law. Democratic leaders warned the bill, estimated to add $1.5 trillion to the federal debt, will haunt the GOP. Lisa Desjardins joins Judy Woodruff to explain some of the major policy shifts in the bill and the scramble to implement it.

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  • Judy Woodruff:

    It is a done deal.

    Congressional Republicans today pushed their sweeping tax bill across the finish line. Then they partied with the president.

    Lisa Desjardins begins our coverage.

  • President Donald Trump:

    Hasn’t been done in 34 years, but, actually, really, it hasn’t been done because we broke every record. It’s the largest tax cut in the history of our country.

  • Lisa Desjardins:

    For President Trump and governing Republicans, a White House victory lap today after scoring their first sweeping legislative win.

  • President Donald Trump:

     Three-point-two trillion dollars, just think of it, in tax cuts for American families, including doubling the standard deduction, and doubling the child tax credit.

  • Lisa Desjardins:

    Final passage of the tax code overhaul came after the bill hurdled last-minute roadblocks. House Republicans first passed it yesterday, but Senate Republicans had to drop three provisions which violated the budget rules governing the process.

    Chants of “Kill the bill” temporarily drowned out senators as they moved to vote after midnight. It passed with all Republicans voting yes, all Democrats voting no, and Vice President Pence presiding.

  • Vice President Mike Pence:

    The Tax Cuts and Jobs Act is passed.

  • Lisa Desjardins:

    Senate Majority Leader Mitch McConnell brushed off the bill’s low ratings as temporary.

  • Sen. Mitch McConnell:

    If we can’t sell this to the American people, we ought to go into another line of work. I think this is an important accomplishment for the country that people will value and appreciate.

  • Lisa Desjardins:

    Then, today, the truly final vote came in the House, and with it another eruption of applause.

  • Rep. Paul Ryan:

    Without objection, the motion to reconsider is laid upon the table.

    (CHEERING AND APPLAUSE)

  • Lisa Desjardins:

    Next, perhaps the largest lawmaker caravan in history took Republicans to the White House by bus.

    As for Democrats, Leaders Chuck Schumer and Nancy Pelosi warned all that this bill will haunt the GOP.

  • Sen. Chuck Schumer:

    Now, we know they are popping champagne down on Pennsylvania Avenue. There are only two places where America is popping champagne- the White House and the corporate boardrooms, including Trump Tower.

  • Rep. Nancy Pelosi:

    Insulting crumbs they give working families are meager and temporary. The tax breaks for corporate America are vast and permanent.

  • Lisa Desjardins:

    As for the bill’s cost, estimated to be $1.5 trillion by nonpartisan analysts, Republicans have insisted that will be paid for by growth.

    But, today, House Speaker Paul Ryan was asked if the growth will be enough to cover that cost.

    He responded-

  • Rep. Paul Ryan:

    Nobody knows the answer to that question, because that’s in the future. But what we do know is that this will increase economic growth.

  • Lisa Desjardins:

    White House officials, including Treasury Secretary Steven Mnuchin, have said the plan will — quote — “pay for itself.”

  • Judy Woodruff:

     So, we have a few questions for Lisa.

    But, first, here is a reminder of the main changes that this bill will bring about. The corporate tax rate drops substantially, from 35 percent to 21 percent. Most individuals will see income tax cuts, but less dramatic, and those expire in 2026.

    The standard deduction doubles for most households. State and local tax deductions remain, but they are limited to $10,000. And it repeals the individual health insurance mandate that was part of the Affordable Care Act.

    President Trump is expected to sign the tax bill into law next week.

    And, Lisa, you have been looking into some of the other policy shifts in this tax bill.

    Let’s talk about that. Step back and let’s look at, how does it change our priorities?

  • Lisa Desjardins:

    Right. I’m so happy to have this conversation.

    First, the business focus that Republicans have here, it seems like it’s part of DNA for Republicans, but looking at it historically, this shift is to a top rate for corporations that is the lowest since before World War II.

    And, also, it changes the conversation. This is the key debate. Republicans see helping business owners as something that helps everyone. Democrats see that as helping the wealthy. Here, Republicans have kind of shifted the policy direction there.

    Another one, Judy, that I haven’t heard talked about much, traditional families. This bill actually does a great deal for traditional families. One, we know the child tax credit is doubled in this bill, but something that hasn’t gotten much attention is alimony. This bill would reverse the way alimony deductions work right now. Someone who pays alimony can take a deduction for that.

    This bill would change that starting in 2019, so that the deduction would only go to the person receiving alimony.

    And this isn’t just me noticing this. Paul Ryan talked about these issues and kind of about the idea of sort of increasing child birth rates just a couple weeks — or last week. Here’s a listen.

  • Rep. Paul Ryan:

    This is going to be the new economic challenge for America, people. Baby boomers are retiring. I did my part. But, you know, we need to have the higher birth rates in this country, meaning baby boomers are retiring and we have fewer people following them in the work force.

  • Lisa Desjardins:

    And so it’s definitely something you see in this bill.

  • Judy Woodruff:

    Pushing toward marriage and families.

  • Lisa Desjardins:

    Right.

  • Judy Woodruff:

    It also affects some things that we buy and sell, like housing.

  • Lisa Desjardins:

    Right.

    There is a housing cooldown in this bill, not just talking about the state and local property tax deductions, which are lowered, so you would actually pay more taxes on high-priced properties.

    But it actually — the mortgage deduction goes down as well, so new properties sold over $750,000, you wouldn’t get that interest deduction. And I spoke to real estate agents today who think that will affect buying and selling of properties.

  • Judy Woodruff:

    So, let’s talk, Lisa, a little bit about how this is implemented exactly. Go over exactly when it goes into effect.

  • Lisa Desjardins:

    All right, so everyone says January 1, but what does that mean?

    It means income earned after January 1 will be taxed under this new law. Income earned this year taxed under the old law. So, you’re filing your taxes in April, what does that mean? It’s the old law. The first time your tax form will see these changes will be the next year, 2019.

  • Judy Woodruff:

    And so we are 11 days away from January 1.

  • Lisa Desjardins:

    Right.

  • Judy Woodruff:

    Employers and others, the IRS, have got to scramble at this point to get everything in order.

  • Lisa Desjardins:

     Right. They have to withhold income based on this new tax law.

    So, here’s the statement from the IRS that they gave me today on how they’re looking at this. They say, “We anticipate the initial withholding guidance in January, and that should allow taxpayers,” they say, “to see benefits of this change as early as February.”

    Judy, that guidance usually goes out early December. So, it’s over a month late. Now, that’s a problem for those who handle payrolls. We got a letter from the American Payroll Association as well. They say this is a Herculean task.

    However, one bright spot, Judy, talking to them today, they say the conference report actually gives more flexibility. They feel like it’s gotten a little easier to handle this task.

  • Judy Woodruff:

     So, some of it being delayed, but what does this mean for these final days of 2017 for people?

  • Lisa Desjardins:

    Well, charities are sending out notices to people to say, if you want to give, give more now, because fewer people will deduct the charitable deduction next year because the standard deduction doubles. So they think more people should give money now, if you’re willing to.

    The other issue, Judy, is property taxes. If you pay high property taxes, you should ask your local assessor if you can pay next year’s taxes early, because that may be a benefit. You might be able to take a deduction now that closes next year.

  • Judy Woodruff:

     So, that means focusing on something other than the holidays?

  • Lisa Desjardins:

    Unfortunately, yes. That is when this is hitting.

  • Judy Woodruff:

    A major tax bill.

    Lisa Desjardins, thank you.

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