The GOP tax bill now heads to a conference committee. Photo: Manuel Balce Ceneta/AP
The Senate has passed its version of the GOP tax bill, but it still differs in some significant ways from the House version. That means the conference committee — which House aides unanimously insist is happening — will have real problems to resolve.
Be smart: A final tax bill isn't a done deal, but once members have put themselves on the record voting for the bill once, they're going to feel a lot of pressure to get to "yes" again.
What has to be worked out:
- The alternative minimum tax. At the last minute, the Senate bill kept the AMT on corporations. It also raised the exemption for the individual AMT, instead of repealing each. The House bill completely repeals both.
- The SALT deduction. Both the House and the Senate limited the state and local tax deduction to a $10,000 deduction for property taxes. But some House members are likely to want more.
- The pass-through rate. The Senate bill allows pass-through corporations (small businesses that file taxes on their owner's return) to deduct 23 percent of business income, while the House created a 25 percent rate for business income (and a 9 percent rate for lower-income individuals).
- ACA individual mandate. The Senate repeals it. The House doesn't, although it has signaled that it'll be kept in the bill in conference.
- Estate tax. The House doubles the size of the estate tax exemption, then repeals the tax after 2024. The Senate doubles the exemption until the tax sunsets beginning in 2026.
- Individual rates. The House has 4 rates and keeps the current top rate of 39.6 percent. The Senate has 7 rates and a top rate of 38.5 percent. There are also differences in the child tax credit value and the standard deduction, and everything on the individual side in the Senate sunsets beginning in 2026.
- Mortgage interest deduction. The House lowers the cap to $500,000 while the Senate keeps it at $1 million.
What is highly unlikely to be in play: The corporate tax rate, which is reduced to 20 percent in each version. This is the centerpiece of the GOP tax plan.