by Countable | 11.14.17
(Updated: 11/14/17) The Senate FInance Committee is considering this legislation and Chairman Orrin Hatch (R-UT) has indicated the committee will consider adding a repeal of Obamacare's individual mandate to the bill. The vote is expected on Wednesday.
Countable's original story appears below.
Both chambers of Congress are charging ahead with their tax reform push after Senate Republicans unveiled their tax plan on Thursday, the same day that their counterparts in the House completed the committee markup of their version of the tax bill.
Senate Finance Committee Chairman Orrin Hatch (R-UT) said the proposal "benefits Main Street businesses and modernizes the tax system in a way that will shift our economic landscape to make America a more inviting place for businesses to invest, keeping jobs from being shipped overseas."
Much of the Senate bill is similar to the House proposal, but there are some crucial policy distinctions that will have to be worked out as Congress moves forward with overhauling the tax code. Here’s a look at the key differences in the Senate tax bill relative to the House’s proposal:
Corporate tax rates would be cut to 20 percent like the House bill, but it wouldn’t take effect until 2019.
Seven individual income tax brackets would remain rather than being reduced to four in the House bill. The Senate bill would set brackets at 10%, 12% (cut from 15%), 22.5% (cut from 25%), 25% (cut from 28%), 32.5% (cut from 33%), 35%, and 38.5% (cut from 39.6%).
The mortgage interest deduction would be capped at $1 million rather than $500,000 as in the House plan.
The deduction for state and local taxes would be eliminated entirely, unlike the House bill which preserved and capped the deduction for state and local property taxes while eliminating the income tax deduction.
The child tax credit would be increased from $1,000 to $1,650 rather than $1,600.
The estate tax’s exclusion threshold would be doubled to $10 million like in the House bill, but it wouldn’t be eliminated after six years.
The pass-through tax rate for personal services corporations wouldn’t be reduced.
The Senate’s proposal is already drawing criticism, including some from within the GOP ranks that could jeopardize its passage. Republican Sens. Marco Rubio (FL) and Mike Lee (UT) said the boosted child tax credit "is simply not enough for working families," while Jeff Flake (AZ) and Bob Corker (TN) have expressed concerns that it would increase the national debt.
The next action on the tax bill will come next week, when the House tax bill that passed the Ways and Means Committee on a party-line vote Thursday comes to the floor for a vote. We’ll have more on that here at Countable as it happens, so stay tuned.
Do you prefer the Senate’s tax proposal or the House’s plan, or do both fall short of your expectations? What provisions of the tax code do you want to see reformed, eliminated, or kept in place? Hit Take Action to tell your reps, then share you thoughts below!
— Eric Revell
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Written by Countable