Bills conflict

Senate Republicans passed their tax overhaul in a 51-49 vote early Saturday, taking a critical step toward accomplishing their top legislative goal. But the GOP hasn’t crossed the finish line. The Senate and House bills have a lot in common — cuts in corporate tax rates, the elimination of some personal tax deductions, and a big change in the estate tax — but these bills also have crucial differences that must be resolved before a final version can be sent to President Donald Trump:

 

Affordable Care Act’s individual mandate

House: Preserves the individual mandate.

Senate: Repeals it. The Congressional Budget Office says 13 million more Americans would be uninsured by 2027, leading the uninsured rate to increase from 11 to about 16 percent. The change is projected to save $338 billion over 10 years.

 

Tax cuts For individuals

House: Both bills cut corporate and individual taxes. In the House bill, both changes are permanent.

Senate: The individual tax cuts expire at the end of 2025. The corporate taxes are permanent.

 

The estate tax

House: Eliminated entirely, starting in 2024. Before being repealed, the estate tax exemption will double. Those inheriting and then selling stocks would also not be required to pay capital gains taxes. The change is projected to cost $151 billion over 10 years.

Senate: Limited, but not repealed entirely. Currently, up to $5.5 million can be passed down tax-free. The Senate bill would allow up to $11 million to be passed on tax free. The change is projected to cost $83 billion over 10 years.

 

The child tax credit

House: The child tax credit, which currently gives parents $1,000 per child, would increase to $1,600 per child. But in part because the credit is currently only available to parents who pay income taxes, more than 10 million children in low-income families would be excluded from the increase. The change is projected to cost $430 billion over 10 years.

Senate: The child tax credit would increase to $2,000 per child. But families who don’t make enough to pay income taxes but still pay payroll taxes would largely be cut off from the expanded benefits. The change is projected to cost $580 billion over 10 years.

 

mortgage interest deduction

House: The mortgage interest deduction for new home buyers is reduced, now only allowing borrowers to deduct interest on up to $500,000 in home loans.

Senate: The maximum mortgage interest deduction is largely unchanged.

 

Tax brackets

House: The seven-bracket structure is collapsed into four, but the top rate of 39.6 percent is maintained. The income level at which that rate kicks in is higher. The change is projected to cost $1.09 trillion over 10 years.

Senate: The seven-bracket structure is maintained, but the top rate is lowered to 38.5 percent. The change is projected to cost $1.17 trillion over 10 years.

 

When corporate tax cuts kick in

House: The corporate tax rate is cut to 20 percent starting in 2018.

Senate: The corporate tax rate is cut to 20 percent starting in 2019. The delay is projected to generate $127 billion over 10 years.

Washington Post