SEARCH
« Paul Manafort worked with Russian intel-connected individual special prosecutors allege | Main | Trump urging longest-serving Republican senator to run for re-election »
Monday
Dec042017

Republicans move closer to clearing tax reform

iStock/Thinkstock(WASHINGTON) -- The House voted Monday evening to go to conference with the Senate on the Republican tax bill, the latest step to advance the measure and get it to President Donald Trump’s desk to sign into law by the end of the year.

The measure passed on a party-line vote, 222-192, with a handful of Republicans from high-tax states who voted against the GOP tax bill opposing the move.

The procedural hurdle took longer than expected to clear, as members of the conservative House Freedom Caucus withheld their votes and were locked in discussion with GOP leaders on the House floor amid concerns about plans to fund the government and stave off a shutdown.

House GOP leaders have introduced a two-week measure to fund the government at current levels from Friday, Dec. 8, to Friday, Dec. 22, but members of the Freedom Caucus are seeking a longer-term temporary arrangement. They eventually voted for the bill after a commitment from GOP leaders to hear out their argument for extending the stopgap funding measure, Freedom Caucus Chairman Mark Meadows told reporters.

On taxes, House and Senate leaders will choose representatives for the group, which will meet to reconcile differences between each proposed overhaul of the U.S. tax code. The Senate will vote to go to conference later this week.

“We’ll be able to get to an agreement in conference. I'm very optimistic about it,” Senate Majority Leader Mitch McConnell, R-Ky., said Sunday in an interview on ABC’s “This Week With George Stephanopoulos.” “We think this will make a big difference in getting our economy moving again and providing jobs and opportunity for the American people.”

Though Democrats will be named to the conference committee, Republicans will only need a simple majority of the conference to pass their product out to the full House and Senate.

That compromise will still have to abide by Senate budgetary rules regarding the deficit in order to clear the chamber with a simple majority vote, which could make it difficult to maintain some of the elements of the House bill in the final version.

While the committee members will meet to discuss the proposals, much of the heavy legislative lifting will take place at the staff level, according to James Thurber, a government professor at American University and the founder and former director of the Center for Congressional and Presidential Studies.

“It’s not like in the movies where they sit there and debate publicly what the major issues are,” he said. “Most of the hard work will be done privately.”

Here are some of the differences between the House and Senate Republican tax proposals:

TAX BRACKETS

The House-passed bill created four tax brackets -- 12 percent, 25 percent, 35 percent and 39.6 percent -- while the Senate bill keeps seven tax brackets and changes them to 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent and 38.5 percent. The changes are temporary in the Senate bill and permanent in the House version.

STANDARD DEDUCTION

The House and Senate bills increase the standard deduction -- the amount that reduces the amount of income each American is taxed on -- from $12,700 to $24,400 for joint returns and from $6,350 to $12,000 for individuals.

According to the Tax Policy Center, more than two-thirds of Americans take the standard deduction when filing taxes.

CORPORATE TAX RATE

The House and Senate bills lower the 35 percent corporate tax rate to 20 percent, though the Senate version would delay the phasing in of that change by a year.

MEDICAL EXPENSE DEDUCTION

The House bill repealed the medical expense deduction, which allows Americans to deduct medical expenses not covered by insurance that exceed 10 percent of adjusted gross income. The Senate bill would expand the deduction by lowering that threshold to 7.5 percent for 2017 and 2018.

INDIVIDUAL MANDATE

The Senate tax bill repealed the individual mandate requiring health insurance passed as part of the Affordable Care Act. House Republicans have voted to repeal Obamacare and the individual mandate previously, but the change was not part of their tax bill passed last month.

According to the nonpartisan Congressional Budget Office, repealing Obamacare’s individual mandate insurance could lead to 13 million more Americans without health insurance, while saving the government $338 billion in federal health insurance subsidy payments over the next decade.

STATE AND LOCAL TAX DEDUCTIONS


The House and Senate bills eliminated state and local tax deductions popular with filers in high tax states like New York and California but would allow the deduction of up to $10,000 in property taxes.

CHILD TAX CREDIT

The House bill would expand the child tax credit from $1,000 to $1,600 per child, while the Senate bill would raise that figure to $2,000 and extend it up to families making a combined $230,000 annually from $110,000.

MORTGAGE INTEREST DEDUCTION

The House proposal allows homeowners to deduct the interest they pay on mortgages for newly purchased homes, capping it at $500,000, while the Senate bill maintains the current $1 million cap.

Copyright © 2017, ABC Radio. All rights reserved.







ABC News Radio