House and Senate Panel Pass Tax Bill in Major Step Toward Overhaul
November 17, 2017 by admin
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Republican lawmakers must also find a way to bridge the big differences between the two bills, a hurdle given the varied priorities of lawmakers in the two houses. For instance, the Senate bill makes the individual income tax cuts temporary and delays implementation of the corporate tax cut by one year. It also includes the repeal of an Affordable Care Act provision requiring that most people have health insurance or pay a penalty.
Graphic
How Every Member Voted on the House Tax Bill
Representatives voted along party lines, with the exception of 13 Republicans, many of whom fought to keep the deduction for state and local taxes.
“We’ve got a long road ahead of us,” Speaker Paul D. Ryan of Wisconsin said after the 227-to-205 vote in the House. “This is a very, very big milestone in that long road.”
The speed with which the House passed a significant rewrite of the United States tax code stunned many in Washington, who have watched previous legislative efforts by Congress succumb to gridlock.
“It’s a combination of shrewd legislative maneuvering and political necessity,” said Ken Spain, a former official with the National Republican Congressional Committee who now lobbies on tax issues. “The result is landmark legislation moving at breakneck speed. It’s a monumental accomplishment.”
Republicans are under intense pressure to get legislation to Mr. Trump’s desk by Christmas, especially after failing in their attempt to dismantle the Affordable Care Act this year. Lawmakers also want to push the bill through quickly to avoid giving lobbyists and Democrats time to mobilize, a strategy that seemed to be validated with the House approval, which came with little drama or consternation. The political uncertainty surrounding the Dec. 12 Alabama Senate race, which could result in Republicans losing a seat or gaining an uncertain ally, is also a factor in the swift pace.
Republicans cannot afford a replay of their health care catastrophe, during which the House managed in May to pass a repeal bill but the Senate could never follow suit. After the House approved its repeal bill, Mr. Trump hosted Republican lawmakers at the White House for a Rose Garden celebration. The exuberance was more contained on Thursday as the Senate continued its work, with Mr. Trump visiting the Capitol to address House Republicans before the vote and sending congratulations via Twitter afterward.
Congratulations to the House of Representatives for passing the #TaxCutsandJobsAct — a big step toward fulfilling our promise to deliver historic TAX CUTS for the American people by the end of the year! https://t.co/8FjefMj6hh
—
Donald J. Trump (@realDonaldTrump)
Nov. 16, 2017
“I hope they have better luck with this issue than they had with the health care issue,” Representative Mark Amodei, Republican of Nevada, said of the Senate.
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Democrats, who have been sidelined in both the House and Senate, continued to denounce the tax overhaul, warning that it would benefit corporations and the rich at the expense of the middle class. But Republicans are planning to pass their tax legislation using procedures that would allow it to gain approval without any Democratic votes in both chambers, leaving Democrats with little recourse aside from trying to sway public opinion.
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“The bill Republicans have brought to the floor today is not tax reform,” said Representative Nancy Pelosi of California, the House Democratic leader. “It’s not even a tax cut. It is a tax scam.”
The House bill would cut the corporate tax rate, to 20 percent from 35 percent. It collapses the number of tax brackets to four from seven, switches the United States to an international tax system that is more in line with the rest of the world and eliminates or scales back many popular deductions, including one for state and local taxes.
It also roughly doubles the standard deduction that most taxpayers claim on their tax returns and increases the child tax credit to $1,600 per child from $1,000. The Senate bill, by contrast, increases the child tax credit to $2,000 per child and lowers the top marginal tax rate to 38.5 percent, from 39.6 percent. The House does not lower the top marginal tax rate for the wealthiest.
The Senate plan also does not fully repeal the estate tax, while the House plan eventually scraps it entirely. The tax cuts for individuals in the Senate plan expire at the end of 2025, while those in the House plan would be permanent.
House Republican leaders prevailed Thursday despite facing opposition from many of their members from New York and New Jersey, who have fought to preserve the deduction for state and local taxes, an important provision for many of their constituents given the high taxes in those states.
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The dozens of changes in the legislation would add more than $1.4 trillion to the federal debt over 10 years.
The House bill allows the deduction of up to $10,000 in property taxes, but that provision was not enough of a concession for them.
Twelve of the 13 Republicans to vote against the bill were from New York, New Jersey or California, three states with high taxes.
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“I just have too many constituents who are going to see their taxes go up,” said Representative Lee Zeldin, Republican of New York, who represents a district on Long Island. “You’re taking more money from a place like New York in order to pay for deeper tax cuts elsewhere,” Mr. Zeldin said.
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The deduction for state and local taxes stands as one of the biggest possible showdowns between the House and the Senate in the weeks to come. The Senate has proposed getting rid of the deduction entirely, a move that would almost certainly drive away additional House Republicans from high-tax states.
Representative Kevin Brady, Republican of Texas and the chairman of the Ways and Means Committee, made clear that the tax effort was far from over.
“The intent of our tax reform bill is to achieve tax relief for individuals at every income level in every state,” he said. “There are still some areas where we will and can make improvements.”
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The Senate proposal faces an uncertain future, given the reservations of a handful of Republican senators. Republicans have a narrow 52-to-48 majority in the Senate, leaving them with little room for defections. They also have limited room to maneuver, as the tax overhaul can add no more than $1.5 trillion to federal deficits over a decade.
On Wednesday, Senator Ron Johnson, Republican of Wisconsin, became the first member of his conference to come out against the tax plan. The votes of several other Republican senators, including Susan Collins of Maine and Bob Corker of Tennessee, are also far from assured.
A new analysis of the Senate bill by the congressional Joint Committee on Taxation could further complicate the bill’s trajectory. The committee said on Thursday that in 2021, the legislation would increase taxes for those earning $10,000 to $30,000. In 2027, after the individual tax cuts expire, the committee projected that those earning $75,000 or less would face higher taxes.
“You’ve targeted the relief to help the wealthy, and the middle-income families are going to get stuck with it,” said Senator Benjamin L. Cardin, Democrat of Maryland.
Republicans said the appearance of a tax increase for low-income people was a mirage resulting from arcane fiscal math. Because Americans would no longer be required to have health coverage, some are expected to go without it. In turn, those people would no longer receive subsidies, in the form of tax credits, for insurance that they do not purchase.
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Passage of the bill in the Senate is unlikely to be as drama-free as Thursday’s approval in the House, given the close divide between the two parties and the outsize influence that each individual Republican senator holds as a result.
Senate Democrats, like their counterparts in the House, have assailed the tax overhaul, but they now face a challenge in blunting the Republicans’ momentum.
“We’ve all known that trying to get the word out about taxes is a bigger challenge than health care,” said Senator Ron Wyden of Oregon, the top Democrat on the Finance Committee. “It’s like listening to somebody discuss prolonged root canal work. This is tedious stuff.”
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Tesla Unveils an Electric Rival to Semi Trucks
November 17, 2017 by admin
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He said the truck would be no less groundbreaking, claiming it would have a single-charge range of 500 miles, greater than many analysts had expected and enough to serve in many typical trucking routes.
The truck can go from zero to 60 miles per hour in five seconds without a trailer, and in 20 seconds when carrying a maximum load of 80,000 pounds, less than a third of the time required for a diesel truck, he said.
He gave no price for the truck but hinted that it would be costly. “Tesla stuff is expensive,” Mr. Musk said, drawing another cheer from the crowd, gathered at an airfield outside of Los Angeles.
But he also said the electric truck would be less expensive to operate, in part because it has fewer components that require regular maintenance (no engine, transmission or drive shaft). Instead, the truck, called the Tesla Semi, is powered by a giant battery beneath the cab. It has two rear axles, each outfitted with two electric motors, one for each wheel. Its acceleration and uphill speeds will allow it to cover more distance in less time than diesel trucks, he added.
As a result, Tesla is estimating it will cost $1.26 per mile to operate, compared with $1.51 a mile for a diesel truck. The cost can fall further — to 85 cents a mile, according to Tesla — if groups of trucks travel together in convoys, which reduces wind drag. “This beats rail,” Mr. Musk said.
In typical Tesla fashion, the truck is a sharp departure from industry norms. The cabin is spacious enough for a driver and passenger to stand. The driver’s seat is in the center of the cab, not on the left side. It is flanked by two laptop-size video screens providing navigation and scheduling data as well as images of blind spots and other areas around the truck.
It will be equipped with radar sensors, cameras and processors to enable drivers to use a version of Autopilot, the advanced driver-assistance system featured in Tesla cars such as the Model S and the new Model 3.
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Autopilot can automatically steer, accelerate and brake for other vehicles and obstacles, although drivers must keep their eyes on the road and their hands on the steering wheel while using the feature.
Mr. Musk said Tesla expects to begin producing the truck by the end of 2019.
Tesla could face difficulty if it is unable to deliver on its promised range of 500 miles on a single charge. Analysts at Bernstein, an investment bank, estimated that Tesla’s truck would be able to travel 300 to 450 miles a day before needing to recharge its battery pack. “We see 300 to 450 miles a day as a significant constraint,” the bank said in a research report.
Mr. Musk said Tesla envisions building a network of superchargers for trucks across the United States and other countries. He gave few details but said they would be solar-powered. “So your truck will be running on sunshine,” he said.
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Tesla is taking on the challenge of electric trucks while struggling with a number of issues in its car business. The company recently introduced its most affordable car, the Model 3, but has run into delays.
When Model 3 production started in July at Tesla’s plant in Fremont, Calif., Mr. Musk said he hoped to increase output to 20,000 vehicles a month by December. But Tesla had assembled just 260 by the end of September.
In a letter to shareholders two weeks ago, Mr. Musk said he hoped to lift production to 5,000 a week early next year. And last month the company fired several hundred workers for what it said was substandard performance, raising further concerns about its ability to meet Mr. Musk’s aggressive manufacturing goals.
The Model 3, with a starting price of $35,000, is intended to become Tesla’s top-selling car. The company’s other vehicles — the Model S luxury sedan and the Model X, a sport utility vehicle — sell for $70,000 and up. Last year, Tesla made about 85,000 vehicles, and it is on track to make about 100,000 this year.
Because the Model 3, with its lower price, will appeal to a wider class of consumers, Mr. Musk is hoping to push sales to more than 500,000 cars in 2018.
So far, the company has attributed the slow pace of Model 3 output to difficulties in producing battery packs at its Nevada plant, called the Gigafactory. It also said welding processes and final assembly tasks in the Fremont factory were moving more slowly than other parts of the manufacturing system.
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“I think the electric, autonomous truck market is a very promising proposition,” said Michelle Krebs, an analyst at Autotrader.com. “One of my concerns with Tesla is they have way too much on their plate. They can’t over-promise and under-deliver on a truck.”
The strain of starting up Model 3 production has taken a toll on Tesla’s bottom line. In the third quarter, the company lost $619.4 million, even as revenue from auto sales increased 8 percent to $2.08 billion.
Aside from running Tesla, Mr. Musk heads the rocket company Space X and a new venture, the Boring Company, which aims to build tunnels for futuristic pods that can carry people at speeds of up to 700 miles per hour.
Competitors have already begun testing electric trucks and self-driving technology. Last month, Daimler demonstrated an electric tractor-trailer. Embark, a Silicon Valley start-up, said this week that it had begun using self-driving trucks to transport Frigidaire refrigerators from a warehouse in El Paso to a distribution center 650 miles away in Palm Springs, Calif.
While Tesla jumped out ahead of established automakers with its electric cars and technologies like its Autopilot system, it faces a much different landscape in trucks, Ms. Krebs said.
Tesla doesn’t have experience in the truck market, and it is up against formidable competitors, like Daimler, that have a built-in customer base, she said.
“The critical thing with trucks is that it is a work tool,” she added. “It has to work all the time. It’s not like a sports car and I have something else in the garage to drive if it’s in maintenance or whatever.”
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