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Illustration: Lazaro Gamio / Axios

The Senate has begun the debate on its version of the Republican tax bill. The bill tracks traditional conservative belief that if business tax rates are lowered, it'll boost the economy and benefit everyone. That means most cuts do go to the wealthy, but supporters say the overall benefits will be shared widely.

Why this matters: So much of what this bill actually does comes down not to numbers and rates, but theories about how the economy will respond. Ultimately, the only way to know how effective it will be is to see what happens.

What the bill does:

  • Significantly reduces the corporate rate while also reforming other parts of the business tax code. This means different businesses will see different degrees of change in what they actually pay in taxes, but gives businesses the opportunity to be more competitive globally.
  • Boosts the economy, at least in the short run. How much is debatable.
  • Makes corporations more profitable. Some of these additional profits will go to shareholders, some to balance sheets, some to workers. How much goes to each is a source of endless debate among economists. (Bloomberg reported that many major companies are already saying they'll first increase dividends or buy back their own shares.)
  • Increases the federal deficit. By how much depends on how much the economy grows, but the Congressional Budget Office thinks it would grow by $1.4 trillion over 10 years.
  • Lowers rates on pass-through income for small business owners.
  • Incentivizes companies to bring investment and production back to the U.S. Whether it will work is a different question.
  • Moves the U.S. to a "territorial tax system" for business income like much of the rest of the world
  • Creates winners and losers among individual filers, but mostly winners until the rates expire in 2026. (Here's details on how the cuts change over time.)
  • Repeals the Affordable Care Act's individual mandate, which will both free people who don't want insurance from paying a fine and raise premiums on middle-class people on the individual market.
  • Moves the ACA more toward a government-funded marketplace for low-income people.

What it doesn't do:

  • Force companies bringing money back from abroad to reinvest this money at home, or use it to increase jobs and wages. This means companies could easily choose not to do this.
  • Provide tax cuts for everyone. While a majority of people in each income bracket will see a tax decrease in the short run, some will see tax increases. Most middle class families will see a tax increase after 2025, when the individual cuts expire.
  • Permanently reform the individual tax code.
  • Close the carried interest loophole for most private equity, venture capital or real estate investors.
  • Pay for itself in economic growth, according to most credible analyses. Some economists say it could come close, others say nowhere near.
  • Address a growing economic shift towards automation, particularly in manufacturing and retail.
  • Break the ACA. Most people will be protected from the premium increases by subsidies, although people who don't qualify for subsidies, want insurance but can no longer afford it may be out of luck.

Go deeper

Omicron cases confirmed in 4 U.S. states

A healthcare worker inserts a Covid-19 rapid test into a machine in Denver, Colorado. Photo: Daniel Brenner/Bloomberg via Getty Images

Five cases of the newly-discovered Omicron variant were detected in New York, Gov. Kathy Hochul (D) and New York City Mayor Bill de Blasio announced on Thursday, making New York the fourth state with confirmed cases.

The latest: In addition to New York, the variant has been confirmed in California, Colorado and Minnesota.

Early winter heat shatters records in U.S., Canada

Temperature departures from average on Dec. 2, 2021, as depicted by the GFS computer model. (Weatherbell.com)

A widespread and intense heatwave is roasting large portions of the U.S. and Canada, shattering daily and monthly temperature records.

Why it matters: Winter is the fastest-warming season across the U.S., and the lingering warmth is shortening the snow season in places like Colorado and Montana, where mountain snowpack is a critical source of water during the summer months.

5 hours ago - Science

COVID time warp

Illustration: Sarah Grillo/Axios

The start of the COVID-19 pandemic seems like a lifetime ago to some, and just yesterday to others. Scientists are beginning to unpack the way people processed the passage of time amidst the stress, uncertainty and isolation of the 1 year, 8 months and 21 days since WHO declared a pandemic.

Why it matters: The pandemic's global effects on how people experience time could provide new insights into the brain's ability to perceive and predict time — a fundamental feature of life.