Senate Finance Releases Tax Reform Proposal: Yesterday, the Senate released information on its tax reform proposal, which contains several differences from the bill reported out of the House yesterday. The Republican conference was briefed on the proposal yesterday morning and a description by the Joint Committee on Taxation of the Senate Finance Chairman’s mark of the Tax Cuts and Jobs Act was released late last night. Significant differences include:
- Delaying the start of the corporate tax rate cut by one year, despite the Administration’s “strong preference” for the cut to begin in 2018
- Keeping the number of tax brackets at seven instead of dropping it to four, and lowering the top tax bracket from 39.6% to 38.5%
- Eliminating the state and local tax deduction entirely (whereas the House would retain a deduction for property taxes up to $10,000)
- Maintaining the estate tax, while doubling the exclusion and
- Significant differences in the treatment of pass-throughs, taxation of foreign income and foreign persons, and the treatment of tax-exempt organizations.
As it stands now, the Senate proposal is intended to stay inside a $1.5 trillion cap on the spending, though it may require some additional changes to ensure it will not increase deficits outside the 10-year budget window to comply with the “Byrd Rule”. The Senate is scheduled to begin a markup on Monday, November 13 at 3 p.m.
Click here for Steptoe’s further analysis of the Senate’s tax reform proposal.
House Rules Committee Releases Updated Text of House Tax Reform Bill: Today, the House Rules Committee released updated text for the House’s tax reform bill (H.R. 1). The Ways and Means Committee completed marking up the bill on November 9.