While Republicans are moving at warp speed trying to hammer out their final tax reform legislation, they're already eyeballing a start date of Jan. 1 for their new plan to take effect, Politico reported.
That would be great news for the individuals and corporations that would see tax breaks kick in as soon as possible, but it's a strategy rife with potential pitfalls on a bill already laden with landmines due to the speed at which Republicans are pulling this together, Politico reports.
The 3 biggest problems of a Jan. 1 launch:
- There are tax increases that, according to Politico, have barely been debated.
- Implementation: Payroll administrators, e.g., would not be able to adjust withholdings that fast.
- Transition: Individuals and corporations wouldn't have time to figure out the ins and outs of a new policy that not all lawmakers themselves have read or understand.
“I’m not so sure the rush actually benefits Republicans very much, and it has the potential of creating real implementation problems," Howard Gleckman, a senior fellow at the nonpartisan Tax Policy Center, told Politico.
But House Ways and Means chairman Kevin Brady disagrees.
"The sooner we get these cuts in place, and the sooner we have a modern tax system for our local businesses, the better," Brady said, Politico reported.
Though most Americans wouldn't exactly know the impact on their taxes until 2019, there are day-to-day and event-driven increases that would go into effect when the bill goes into effect.
For example, people selling a home after Jan. 1 could find themselves paying thousands more in taxes if they haven't been in their homes 5 of the past 8 years, up from the current 2 of the past 5 years, Politico reports.
“It can mean the difference between thousands and thousands of dollars in tax, or not,” Evan Liddiard, director of tax policy at the National Association of Realtors, told Politico. "People are going to have to be ready to shift to a new world.”