The House and Senate drafts, which help corporations and the rich and could leave millions without health insurance, must be reconciled into a single bill
All Republicans want for Christmas is tax reform – and they are poised to get it.
The Senate Republican tax overhaul that passed early on Saturday morning is filled with traditional GOP priorities, including big treats for corporations and the most affluent sections of society. But the bill will now need to be reconciled with the House-passed version.
The proposals differ on key provisions, setting up a challenge for lawmakers as they balance competing priorities between the chambers in a high-speed dash to draft a unified bill by Christmas.
Here’s a look at some of the measures that could be under consideration as Republicans finalize their tax overhaul:
Corporate tax rate
Slashing the corporate tax rate from 35% to 20% is at the centerpiece of both bills. Donald Trump has drawn a line in the sand at 20% and said he would not accept a higher rate, though some Republicans have proposed raising it gradually over time. There are also discrepancies between the plans on when the reduction would start. The Senate plan includes a one-year delay.
Individual tax rates
Republicans have touted their tax plan as major relief for the middle class. The Senate majority leader, Mitch McConnell, even promised that under the Senate plan no middle-class American would see a tax increase. He later said he “misspoke on that”. Independent analyses have found that the Senate plan would largely benefit America’s highest earners and offer mixed results for middle-income taxpayers.
The House and Senate plans differ in how they would affect individual tax rates. The House plan would condense income tax brackets from seven to four, while the Senate plan would keep seven brackets and reduce their rates. Under the Senate plan, at least some groups in every bracket would face a tax increase and that share would grow over time. Most of the provisions relating to individuals are set to expire in 2025.
The House GOP plan would eliminate the estate tax – or the death tax, to some critics – which affects people who leave a fortune of $5.49m or above to their children. After that there is a 40% tax. The House bill eliminates the tax entirely after 2024. The Senate…