Senate Republicans passed their tax overhaul in a 51-to-49 vote early Saturday morning, taking a critical step toward accomplishing their top legislative goal.
But the GOP has not crossed the finish line just yet. Both the Senate and the House have passed tax reform bills that have a lot in common — including dramatic cuts in corporate tax rates, the elimination of a number of personal tax deductions, and a big change in the estate tax — but these bills also have a number of crucial differences that must be resolved before a final version can be sent to President Trump's desk for signing.
Here are some ways the two bills differ:
House Speaker Paul D. Ryan (R-Wis.) has indicated he’s open to adding the mandate repeal, suggesting the final bill will repeal it.
House Preserves the Affordable Care Act’s individual mandate.
The politics House Speaker Paul D. Ryan (R-Wis.) has indicated he’s open to adding the mandate repeal, suggesting the final bill will repeal it.
Senate Repeals the Affordable Care Act’s individual mandate. The Congressional Budget Office says 13 million more Americans would be uninsured by 2027, leading America’s uninsured rate to increase from 11 percent to about 16 percent.
House Both the House and Senate bills cut corporate taxes and taxes on individuals. In the House bill, both corporate and individual taxes are permanent.
Senate The individual tax cuts expire at the end of 2025. The corporate taxes are permanent.
The politics Senate rules require that the bill be budget neutral after 10 years. The Senate sunsets the individual tax cuts to partly achieve that. Republicans have predicted that future Congresses will extend these tax cuts later.
House Eliminated entirely, starting in 2024. Before being fully repealed, the estate tax exemption will double. Those inheriting and then selling shares of stocks would also not be required to pay capital gains taxes on those sales.
The politics The heirs of 2 out of every 1,000 Americans face the estate tax. Republicans, who call it the “death tax,” have argued it hurts farmers.
Senate Dramatically limited, but not repealed entirely.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.
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, according to the Center on Budget and Policy Priorities.
The politics Both the House and Senate changes to the child tax credit to require a Social Security number, which would prevent undocumented immigrants from receiving it.
Senate The child tax credit would increase to $2,000 per child. But the millions of 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 politics Sens. Marco Rubio (R-Fla.) and Mike Lee (R-Utah) tried inserting a provision into the Senate bill that would have expanded this tax credit for millions of low-income families, and proposed to pay for it with a small bump in corporate taxes. Their proposal failed.
Sens. Marco Rubio (R-Fla.) and Mike Lee (R-Utah) tried inserting a provision into the Senate bill that would have expanded this tax credit for millions of low-income families, and proposed to pay for it with a small bump in corporate taxes. Their proposal failed.
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, far below the current level.
Senate The maximum mortgage interest deduction is largely unchanged.
House The seven-bracket structure is collapsed into four brackets, but the top tax rate of 39.6 percent is maintained. The income level at which that rate kicks in, however, is far higher.
Senate The seven-bracket structure is maintained, but the top rate is lowered to 38.5 percent.
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.