The House of Representatives and Senate are set to vote Monday and Tuesday of next week to exit conference and agree on a joint tax bill. The bill would then be sent to President Trump’s desk later in the week to be signed into law.
For individuals, the agreement includes a top 37- percent individual tax rate; a doubling of the standard deduction; an elimination of the Affordable Care Act’s individual health insurance mandate; a mortgage interest deduction on up to $750,000; a doubling of the estate tax; no “first-in-first-out” rule on selling shares and calculating capital gains; and up to $10,000 in state and local deductions on property or income taxes. It remains to be seen whether conferees settle on four or seven individual tax brackets.
For businesses, the agreement includes a 21-percent corporate tax rate, a pass-through deduction of 20 percent, five years of immediate business expensing; a repeal of the corporate alternative minimum tax; and a preservation of private activity bonds. No details on repatriation of foreign revenues have been released.
The medical expense deduction, tax-free graduate school tuition waivers, student loan interest deduction and teacher spending deduction will all remain untouched. Under the bill, tax returns being filed next year for 2017 would not be affected, but returns filed in 2018 for 2019 would. Other details of the plan have not yet been released.
Legislative text of the bill is scheduled for release Friday, December 15 followed by a Joint Committee on Taxation score to ensure it fits under the Senate Byrd Rule stipulating that costs cannot exceed $1.5 trillion. Though rules of order stipulate the Senate vote first, Politico has reported that the House will likely vote Monday and the Senate Tuesday so the House can begin work on a government funding resolution.
