Republicans Reach a Deal on Tax ReformDecember 14, 2017
On Dec. 13, Republicans struck a deal on a sweeping tax reform overhaul, including steep corporate and individual rate cuts, and hope to have legislation on President Donald Trump’s desk by next week. Despite a pre-conference meeting deal negotiated by Republicans, later that same day, Republican and Democratic conferees from both chambers joined together for a conference meeting on the Tax Cuts and Jobs Act (H.R. 1) in an effort to hash out the differences between the respective versions passed by the House and Senate.
Although, the full conference report has yet to be released, thus far, it has been reported that the corporate tax rate will be 21 percent, higher than the 20 percent in each chamber’s separate legislation, and will start in 2018 instead of being delayed until 2019 as the Senate-passed version proposed. The agreement includes a 37 percent top tax rate for individuals, lower than either the House or Senate passed bills.
Pass-through businesses that pay taxes through the individual side of the tax code will get a 20 percent deduction, and businesses will get to immediately write off investments for the next five years. The corporate alternative minimum tax (AMT), in a final deal, is out. However, the AMT for individuals is retained, though fewer people are expected to pay it as the exemption will be raised to $1 million for couples. The estate tax, long a target for elimination by Republicans, will be kept, though the exemption will be doubled. The final legislation will also end the ACA’s mandate that all Americans have health insurance or face a fine.
The Senate plans to take up the bill first, on Dec. 18, with a final vote by the chamber on Dec. 19, before it heads to the House floor.