Republicans in the House and Senate have struck a deal on the tax bill. Details of the agreement have started to leak out as Senate Majority Whip John Cornyn said he has confidence it will pass next week. From Politico:
One major deal that fell into place, on the state and local tax deduction, would allow taxpayers to choose a property tax deduction or a deduction for state and local income taxes, up to $10,000 in either case, according to a GOP congressional aide and a person familiar with the process.
The issue has been a major snag throughout the tax fight, with Republican lawmakers from the Northeast clamoring for the property tax deduction and those from California insisting on the income tax write-off. Republican leaders originally wanted to abolish the entire state and local tax deduction.
Republicans in the House from high taxed states like California, New Jersey, and New York voted against their chamber’s tax bill due to the eliminate of the state and local tax deductions.
The House and Senate passed their own tax bills, which means the lawmakers need to reconcile on one bill and pass it before it lands on President Donald Trump’s desk.
Politico reported that the lawmakers “made progress Tuesday toward and agreement that would set the corporate tax rate at 21 percent and the top individual rate at 37 percent.” That can still change along with a supposed deal that will “allow homeowners to deduct the interest on up to $750,000 in mortgage debt, down from $1 million now.”
Still in contention is how to tend to the pass-through businesses “whose owners pay taxes on their businesses through the individual side of the tax code.” The lawmakers want to make it easier for those businesses “to claim the Republicans’ reduced business rate.”
The plan still includes repealing the individual mandate of Obamacare, which the Senate had in their bill. The House did not have it in theirs.
How Will It Do in the Senate?
Roy Moore lost the Alabama senate election, which means the GOP will only have a 1 seat majority in the chamber. Democrats salivated over this victory and have demanded the majority hold the vote until they swear in Doug Jones.
As it stands now, Sen. Bob Corker (R-TN) opposes the bill so if the majority doesn’t wait until Jones is sworn in, the GOP can only lose one more vote so Vice President Mike Pence can break the tie.
Sen. Susan Collins (R-ME) doesn’t approve of the 37% tax rate for the top bracket. Sen. Marco Rubio (R-FL) still wants the party to do more to expand the Child Tax Credit. Besides these concerns, neither one have not come out and opposed the bill.
Trump gave a speech today about the tax bill, promising everyone that they’re “so close” to getting the tax bill finished. From Fox News:
“I’m excited to announce if Congress sends me a bill before Christmas, the IRS — this is just out, this is breaking news — has just confirmed that Americans will see lower taxes beginning in February,” Trump said. “Just two short months from now.”
“We want to give you, the American people, a giant tax cut for Christmas,” the president said. “When I say giant, I mean giant.”
Trump said during his speech that a family of four earning $75,000 a year would see an income tax cut of more than $2,000, slashing their tax bill in half, if enacted.
“Our current tax code is burdensome and unfair,” Trump said. “It’s exported our jobs, closed our factories and left millions of parents worried that their kids will have less opportunity than the last. Our factories have left.”
Trump talked up the bill’s expansion of the child tax credit for working families, saying “you’ll hear the numbers very soon.”
“They’re even larger than anticipated,” he said.
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