Senate Republicans are set to unveil a tax-reform bill that differs significantly from legislation in the House, setting up a battle within the GOP as it tries to hand President Trump his first major legislative victory.
Senate Republicans are set to unveil a tax-reform bill that differs significantly from legislation in the House, setting up a battle within the GOP as it tries to hand President Trump his first major legislative victory.
Tax-writers in the Senate are expected to eliminate the deduction for state and local taxes in their legislation, a break with House Republicans, who have proposed keeping it in place for property taxes up to $10,000.
About two dozen House Republicans from high-tax states had insisted on the $10,000 exemption in the bill, saying it was critical to ease the financial impact on their constituents.
Senate Finance Committee Chairman Orrin Hatch Orrin Grant HatchOvernight Finance: Live coverage of GOP tax bill markup| House gets deal on flood insurance overhaul| Five questions for next Fed chair| Chip makers plan tech mega-merger Cornyn: Senate GOP tax plan to be released Thursday This week: GOP seeks to advance tax overhaul MORE (R-Utah) acknowledged he’s bracing for a fight.
“There’s a lot of people who want that deduction,” Hatch said.
Senate Republicans are also expected to increase the threshold for the popular mortgage interest deduction to $1 million, a substantial increase over the House, which lowered the cap to the first $500,000 of a mortgage
They will also change the House formula for taxing small businesses with a new “pass-through” rate of 25 percent. GOP senators say businesses with large capital expenses will see lower rates compared to the House bill, which would tax 70 percent of small-business income at the individual tax rate and 30 percent at the new pass-through rate.
“It will be a different bill,” said Sen. Deb Fischer Debra (Deb) Strobel FischerDissent is democratic: Stop calling McCain, Corker, Flake RINOs GOP senators fear bill will be cast as gift to rich GOP plans tax blitzkrieg MORE (R-Neb.), who pressed President Trump at a lunch two weeks ago to make sure middle-class families and small businesses would see substantial tax relief.
Sen. Rob Portman Robert (Rob) Jones PortmanBipartisan group of lawmakers aim to reform US sugar program Overnight Cybersecurity: What we learned from Carter Page’s House Intel testimony| House to mark up foreign intel reform law| FBI can’t access Texas shooter’s phone| Sessions to testify at hearing amid Russia scrutiny Bottom Line MORE (R-Ohio), a key member of the Senate Finance Committee, told Fox News on Tuesday, “I think there will be no deduction for state and local taxes.” Sen. David Perdue (R-Ga.) said that was also his expectation.
The Senate Finance Committee will share the details of the legislation with Republican senators at a special conference meeting scheduled for 11:30 a.m. Thursday.
Senate GOP aides say the proposal will be in the form of a “conceptual mark,” which will provide complete details, but no bill text.
Senate Republicans note that high-tax states such as New York, New Jersey, Illinois and California don’t have representation in their conference, making it easier for them to eliminate the state and local income tax deduction.
“Our bill obviously will have a different approach, by and large, in some cases from what the House has,” said Senate Republican Conference Chairman John Thune John Randolph ThuneOvernight Tech: Senate panel subpoenaed ex-Yahoo chief| Twitter gives all users 280 characters| FBI can’t access Texas shooter’s phone| EU wants tax answers from Apple Overnight Cybersecurity: What we learned from Carter Page’s House Intel testimony| House to mark up foreign intel reform law| FBI can’t access Texas shooter’s phone| Sessions to testify at hearing amid Russia scrutiny Former Yahoo CEO subpoenaed to appear before Congress MORE (S. D.).
Thune noted that “the dynamic” of state and local taxes “is different, obviously, in the Senate than in the House.”
“We want to do as many base-broadeners as we can to help offset the things we want to do on rates,” he added.
Senate Democratic Leader Charles Schumer Charles (Chuck) Ellis SchumerTrump is right: The visa lotto has got to go Schumer predicts bipartisan support for passing DACA fix this year No room for amnesty in our government spending bill MORE (N.Y.) was eager Wednesday to highlight the emerging divide between House and Senate Republicans on the issue.
He noted that 49 percent of taxpayers in Rep. Barbara Comstock Barbara Jean ComstockWilson endorses Foxx as next House Education chairman House transfers DC Metro board appointments to DOT Dems target DC-area GOP rep on Metro funding MORE’s (R-Va.) district in suburban Washington, D. C., take an average deduction of $13,500 for state and local taxes. Comstock is a top Democratic target in the 2018 elections.
“Barbara Comstock, in my view, would write her own defeat if she votes for this bill,” he said.
Schumer also pointed to GOP Reps. Ed Royce (Calif.), Erik Paulsen (Minn.), Peter Roskam (Ill.) and Mimi Walters (Calif.) as other lawmakers from high-tax suburban areas whose constituents would be hit hard by ending the deduction.
Senate Republican leaders are conflicted over another major change from the House bill: the potential addition of language repealing the federal mandate requiring people to buy health insurance.
Conservatives, such as Sens. Ted Cruz Rafael (Ted) Edward CruzOvernight Finance: GOP criticism of tax bill grows, but few no votes| Highlights from day two of markup| House votes to overturn joint-employer rule| Senate panel approves North Korean banking sanctions GOP criticism of tax bill grows, but few ready to vote against it Anti-gay marriage county clerk Kim Davis to seek reelection in Kentucky MORE (R-Texas), Rand Paul Randal (Rand) Howard PaulOvernight Finance: GOP criticism of tax bill grows, but few no votes| Highlights from day two of markup| House votes to overturn joint-employer rule| Senate panel approves North Korean banking sanctions McConnell expects Paul to return to Senate next week Cruz: It’s a mistake for House bill to raise taxes MORE (R-Ky.) and Tom Cotton Tom CottonOvernight Finance: GOP criticism of tax bill grows, but few no votes| Highlights from day two of markup| House votes to overturn joint-employer rule| Senate panel approves North Korean banking sanctions GOP senator: CBO moving the goalposts on ObamaCare mandate Cruz: It’s a mistake for House bill to raise taxes MORE (R-Ark.), support repealing ObamaCare’s individual mandate, which would raise an estimated $300 billion-$400 billion over the next decade that could be used to further lower tax rates.
But moderate Republicans aren’t thrilled with the idea, because it could cause insurance premiums to rise and millions to lose coverage, according to the Congressional Budget Office.
“It complicates the efforts to get a tax-reform package through the Senate,” warned Sen. Susan Collins Susan Margaret CollinsBipartisan group of lawmakers aim to reform US sugar program A bipartisan bridge opens between the House and Senate Gaming the odds of any GOP tax bill getting signed into law MORE (R-Maine), a key moderate.
Republican senators said Wednesday afternoon that GOP leaders were whipping members on the question of whether to add the mandate provision.
By eliminating the property tax deduction along with deductions for state and local taxes, Senate Republicans will have more revenue to address the concerns of two key special interest groups: the National Federation of Independent Business (NFIB) and the National Association of Home Builders.
