WASHINGTON (AP) — Significant differences separate the massive tax packages passed by the House and Senate on estate taxes, health care and a prized deduction for home mortgage interest, though Republican leaders are confident none is insurmountable.
Republicans are trying to pass the biggest rewrite of the tax system in more than 30 years.
“We’re looking forward to getting a final bill to the president’s desk, soon,” Senate Majority Leader Mitch McConnell, R-Ky., said Monday.
Both versions would cut taxes by about $1.5 trillion over the next decade while adding billions to the deficit. But they take different approaches.
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“I don’t see anything here that is a deal-killer,” said Jon Traub, a former staff director for House Ways and Means Republicans who is now at Deloitte Tax. “Having come this far, I don’t know why they wouldn’t be able to finish.”
The Senate bill passed by a thin 51-49 margin, so any changes in that measure will have to be negotiated with the senators who care about that issue, said Marc Gerson, a former tax counsel for Ways and Means and now chair of the law firm Miller & Chevalier.
“Overall, I think that the Senate bill is kind of the base text,” Gerson said.
The differences and how each issue is likely to play out:
PERSONAL INCOME TAX RATES
The House bill condenses current seven brackets to four: 12 percent, 25 percent, 35 percent and 39.6 percent. The Senate measure retains seven brackets but changes them and reduces the top bracket from 39.6 percent to 38.5 percent.
The Senate bill ends the reductions in 2026; they’re permanent in the House version.
It has long been a Republican goal to reduce the number of tax brackets, so House Republicans will have a strong argument on this issue.
The Senate bill has been criticized because the tax cuts for individuals are temporary while the tax cuts for corporations are permanent. Senators, however, had to make some of the tax cuts temporary to comply with Senate rules that prevented Democrats from blocking the bill.
On Sunday, Trump’s budget director, Mick Mulvaney, said he was comfortable with the Senate plan because he doubted that future congresses would let the tax cuts expire.
HOME MORTGAGE INTEREST DEDUCTION
The House version limits the deduction to interest paid on the first $500,000 of a loan for new home purchases….