The bill still needs to be reconciled with the House-passed legislation, which differs in some significant ways from the Senate plan. If the bill is signed this year most provisions will take place January 1st, 2018. Congress is set to adjourn December 15th for Christmas break, House Speaker Paul Ryan says he will keep the house open if needed to pass tax reform.
The House plan went with four brackets: 12 percent, 25 percent, 35 percent and a top rate that stays at 39.6 percent for millionaires.
The Senate bill sticks with seven brackets of 10 percent, 12 percent, 22.5 percent, 25 percent, 32.5 percent and 35 percent but lowers the top rate to 38.5 percent for high-income individuals and couples.
Personal deductions: The Senate bill nearly doubles the standard deduction level to $12,000 for individuals and $24,000 for couples.
SALT (State and Local Taxes)
Allows people to deduct their state and local income, sales and property taxes. The House bill limits the deduction to just property taxes and caps it at $10,000.
The Senate plan eliminates the so-called SALT deduction entirely.
Mortgage Interest Deduction
House would cap the deduction for mortgage interest debt at $500,000, down from the current cap of $1 million.
Senate Republicans have decided to leave the deduction alone.
Corporate Tax Rate
House wants 2018
Senate wants 2019
The United States’ tax system needs to be more competitive so that companies invest here and that they do not have an incentive to shift profits to lower-tax jurisdictions.
The Senate plan will impose taxes on American and foreign companies that shift offshore money earned in the United States. There would be an effective minimum tax on money earned domestically and a 12.5 percent tax on foreign revenue from intellectual property.
The original House approach would have levied a 20 percent “excise tax” on payments between American and foreign companies that are affiliated with each other.
Adoption, Health, Education
The House repealed deductions for medical expenses and counted tuition wavers that are widely used by graduate students as taxable income.
The Senate maintained the deduction for medical expenses and provides “education relief” for graduate students.
The senate bill will allow for deductions of medical expenses not covered by Obamacare because if Obamacare’s mandate is repealed, thousands of people are expected to drop their health insurance, raising the cost for those who decide to keep it.
Estate Tax (Death Tax)
House Republicans decided in their bill to double the amount of inherited wealth that is exempt from the tax to $11 million, from $5.5 million, and phase out the tax after six years.
In the Senate, the exemption is also doubled, but the death tax never dies.
Fans rooting on their favorite college teams will no longer be able to deduct their tickets as a “charitable donation.”
Eliminates tax-exempt bonds for sports facilities.
Private art collectors whose pieces are housed in “private foundations” may no longer be eligible for tax breaks under the new plan.
Limits gambling deductions.
Language about unborn child having a 529 savings account. This is language that could weaken Roe v Wade. Making life of a child start at conception.
23% tax deduction instead of 17.4% for Mom and pop shops and no public corporations.
Repealing a fee paid by some Americans who do not buy health insurance.
ALL democrats voted NO on this tax bill. All republicans voted YES, except Corker. Remember this in 2018. MAGA