Americans are Mixed on Trump's Tax Bill

President Donald Trump secured a sweeping shift in US domestic policy as the House passed a $3.4 trillion fiscal package that cuts taxes, curtails spending on safety-net programs and reverses much of Joe Biden’s efforts to move the country toward a clean-energy economy.

The 218-214 vote in the House Thursday sends the legislation to Trump, in time for a July 4 deadline he set. House leaders had to keep earlier procedural votes open for hours to convince a small band of holdouts to support the legislation. Cliff Young joins Balance of Power to discuss how Americans are feeling about Trump's tax bill.

The Tax Bill is Law. Now What?

President Donald Trump signed the GOP tax bill into law July 4, but Congress’s work isn’t over—and the IRS’s is just beginning.

Several tax policy priorities were left out of the $3.4 trillion measure, including tax treaty-like benefits for companies doing business between Taiwan and the US, a new round of retirement tax changes, and an extension of the work opportunity tax credit.

These issues have bipartisan support and are sure to be the subject of lobbying from business groups, but it will be an uphill battle to get Democrats interested in working with Republicans on tax legislation after being cut out of the new partisan law.

“There is a question of kind of the fallout from this bruising reconciliation bill, and how quickly the parties turn to working on a bipartisan bill,” said Marc Gerson, co-leader of Miller & Chevalier’s tax policy practice and a former GOP tax aide.

House Republican leaders floated pursuing additional legislation this Congress using the budget reconciliation process, which allows them to bypass Democrats. But it’s unclear to what extent tax policy would be part of any subsequent reconciliation bill.

There’s also the matter of implementing the new law. The Treasury Department and IRS will need to issue guidance that lays out what taxpayers must do to adhere to the new provisions.

The text of one provision in the law, a tax break for tipped workers—one of President Donald Trump’s hallmark campaign promises—raises questions over whether the exempt income includes tips paid through online payment apps, which the IRS has historically included in tipped income, or only those paid in cash or credit.

The same lack of clarity goes for what occupations are considered “tipped occupations” eligible for the tax break. The IRS also will have to update forms and systems, and train its customer service workers on the new provisions as about 22% of its customer service workers and 27% of tech employees look to leave by the end of the year.

Many of the tax breaks for individuals in the law take effect for the current tax year, meaning the IRS will need to update forms ahead of next year’s filing season.

The IRS also will be tasked with enforcing taxpayer compliance with the new law. During talks between Trump, congressional Republican leaders, and conservative holdouts ahead of the House passage, negotiators discussed the administration’s approach to enforcement of the rollbacks of the Biden administration policies for wind and solar energy. The new law phases down solar and wind tax credits. Read More

--------

Watch Bloomberg Radio LIVE on YouTube

Weekdays 7am-6pm ET

Follow us on X

Subscribe to our Podcasts:

Bloomberg Daybreak

Bloomberg Surveillance

Bloomberg Intelligence

Balance of Power

Bloomberg Businessweek

Listen on Apple CarPlay and Android Auto with the Bloomberg Business app:

Apple CarPlay

Android Auto

Visit our YouTube channels:

Bloomberg Podcasts

Bloomberg Television

Bloomberg Originals