On Wednesday, the Senate agreed to officially begin conference negotiations with House members to reconcile differences between the House version of the Tax Cuts and Jobs Act (which passed on November 16th) and the Senate version which passed in the early morning hours of this past Saturday, December 2nd. Republicans are aiming to send a finished bill to President Trump’s desk by Christmas. Behind-the-scenes talks had already been taking place since the Senate passed its version of the bill.
Central differences in the two proposals need to be resolved on individual tax brackets and rates, the structure for taxing" pass-through" business income, keeping or repealing the alternative minimum tax, repealing the estate tax, the expiration of key tax breaks and more—all the while keeping the final tax measure under the $1.5 trillion limit set by a budget framework previously adopted by both chambers.
Sen. Ron Johnson said he's already in discussions with House members about a final rate structure for pass-through businesses, whose owners pay taxes on their individual returns. The Wisconsin Republican was a key holdout before the Senate passed its tax plan last week, voting for the measure only after reaching a deal with Senate GOP leaders to expand the proposed deduction for pass-through income from 17 percent to 23 percent. However, the provision excludes the interests trusts own, so Sens. Johnson, Daines (R-MT), and Inhofe (R-OK) are pushing the conference committee to expand a tax break for pass-through owners to trusts.
Finalizing the rate on corporations are also a top priority. Talks appeared to make progress on Thursday as lawmakers debate setting a corporate rate of 20 percent in their final tax bill — below the 22 percent figure that some lawmakers have sought. President Trump and many GOP lawmakers have been intent on setting the corporate rate at 20 percent to keep U.S. companies from moving their factories and jobs offshore. But Trump unexpectedly walked back from what he’d called a “non-negotiable” position on Saturday, when he suggested he was open to 22 percent.
Sen. Rob Portman (R-OH), one of the chief tax writers, said that the goal of cutting the corporate rate is “to get it slightly below the industrialized country average, so that in the next couple years we’re not back in the same situation we are now.” The average rate among countries in the Organisation for Economic Co-operation and Development is about 23 percent.
Sen. Susan Collins (R-ME), another hard-won vote, had secured commitments from both the White House and Senate GOP leaders to pass a series of bills designed to mitigate the impacts of repealing the Affordable Care Act’s individual mandate. For his part, House Speaker Paul Ryan said on Wednesday, “I wasn’t part of those conversations,” but acknowledged that Collins had “put some very productive, constructive solutions on the table” that will “invite a new conversation about how we fix health care.”
Once the conference committee reaches an agreement on a final bill, the bill will be subject to a final straight yes-or-no vote in each chamber. ATA strongly supports tax-reform and continues to engage with members in both chambers to pass a law that will provide a much needed boost to the U.S. economy, encourage critical business investment, and produce good-paying American jobs.
Information via ATA