by Countable | 12.2.17
Senate Republicans passed their version of tax reform legislation in the early hours of Saturday morning on a 51-49 vote, with Sen. Bob Corker (R-TN) the lone GOP senator opposing the bill because of concerns the bill would increase deficits.
While Senate passage represents a significant step in the process for the GOP’s tax reform package, there remain several hurdles left for it to clear before the bill can reach President Donald Trump’s desk. First, a conference committee will be convened early next week so that lawmakers can work out the differences between the House- and Senate-passed versions of the bill. Then, each chamber will need to pass the legislation reported by the conference committee.
Here’s a look at some of the key differences that will need to be resolved by the conference committee:
Individual Income Tax Brackets: The House bill has four brackets for individuals: 12% up to $45k; 25% from $45k - $90k; 35% after $200,000; and 39.6% over $500,000. The Senate bill has seven brackets like the current tax code, five of which are reduced slightly. Additionally, the House’s individual income tax cuts are permanent, while the Senate’s sunset at the end of the 10 year budget window.
Corporate Tax Rate: The corporate tax rate in both bills would be cut from 35% to 20%, but under the House bill the change would take effect in 2018 while the Senate bill delays the change until 2019.
Child and Family Tax Credit: The House bill sets the child tax credit at $1,600 and has a $300 family flexibility credit, while the Senate bill’s child credit is $1,650 and contains a $500 credit for non-child dependents.
Alternative Minimum Tax: The House bill repeals the Alternative Minimum Tax, while the Senate bill keeps it in place with higher exemption amounts and thresholds phased out..
Estate Tax: Both the House and Senate double the estate tax’s (aka the death tax) exclusion threshold to $10 million, but the House version repeals the estate tax after six years while the Senate version keeps it in place.
Mortgage Interest Deduction: The House bill decreases the cap on deductible mortgage interest from $1 million to $500,000 while the Senate bill leaves it unchanged.
Congressional Living Expense Deduction: The Senate version includes the legislative text of Sen. Joni Ernst’s (R-IA) SQUEAL Act which eliminates the deduction, while the House’s doesn’t.
Tell your reps what provisions in the House and Senate tax reform bills should be changed in the conference committee using the Take Action button and share your thoughts in the comments below.
— Eric Revell
Tax Cuts and Jobs Act (House Version)
Tax Cuts and Jobs Act (Senate Version)
(Photo Credit: Carso80 / iStock)
Written by Countable