Speed Reads

GOP tax plan

The GOP's rush to pass tax cuts will leave huge loopholes, tax experts warn

President Trump says, dubiously, that Republicans are preparing to pass the largest tax cut in U.S. history, but even if that's not quite true, it is incontrovertible that Republicans are trying to push through major tax overhauls at breakneck speed, at least by congressional standards. Neither of the bills are finalized, though House Republicans plan to pass their bill Thursday or Friday, and Trump publicly made suggested changes as recently as Monday. The Congressional Budget Office said Monday that the official congressional tax analysts at the Joint Committee on Taxation haven't had enough time to analyze the full economic impact of the bills.

"The rush to 'get it done' — particularly on the business side, where the most sweeping changes are planned — is alarming tax specialists who warn that new and unforeseen complexity, loopholes, and glitches could come back to haunt tax collectors and taxpayers," says The New York Times, pointing out several "loopholes and tax dodges spotted so far — whether unintended or not." The loopholes could allow small and medium businesses to take advantage of offshore tax shelters, wealthy hedge fund investors could claim lower tax rates intended for pass-through businesses, and other provisions, anodyne on their own, would open up new tax dodges.

"There is not a single advantage this has, except for students of people like me, who will get paid more to figure out how to game the system," Steven Rosenthal at the nonpartisan Tax Policy Center, formerly with the Joint Committee on Taxation, tells The New York Times about one of the provisions. The Tax Policy Center estimates that half of the net tax cuts would go to the top 1 percent of earners. Supporters of the tax bills say the legislation will be imperfect but can be fixed once enshrined in law.