A watered-down version of the Republican tax reform plan unfurled by the Senate Finance Committee Thursday afternoon made several significant changes to an earlier plan released by House Republicans, but Senate leaders and White House officials remained stoic that the bill would still provide a long-awaited tax system overhaul.
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“It’s apparent that this country is lagging behind a lot of other countries,” Sen. Orrin Hatch (R-Utah) said during a press conference. “And our foreign economics are a disaster in comparison to what they can be. We’re about to change that.”
The Senate’s plan comes on the heels of a similar one proposed by the House Ways and Means Committee last Thursday.
Key differences include a year-long delay in reducing the corporate tax rate from 35% to 20% -- an amendment bitterly opposed by some Republicans. The House also sought to simplify the number of tax income brackets from seven to four, but the Senate kept seven brackets, fiddling just slightly with some of the rates.
Another major change was the Senate’s refusal to acquiesce to pressure from left-leaning states including New York, California and New Jersey to not eliminate the controversial state and local tax deductions, which largely favor high-income states. Following pressure from Republican representatives from those states, the House negotiated allowing up to a $10,000 deduction on property taxes.
Though President Donald Trump reportedly favors the House’s plan, political pressure to pass some type of overhaul is mounting amid significant Democratic victories in Tuesday’s elections ahead of the looming 2018 midterms.
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Hopes that House and Senate Republicans could present a united front on tax reform to avoid a failure similar to their inability to overhaul the Affordable Care Act were seemingly squashed with the presentation of this plan. Differences between the plans could ultimately sideline the legislation, though leaders have remained adamant that it could be passed as soon as Christmas.
“America is ready for tax reform again,” Sen. Mitch McConnell (R-Ky.) said. “To get growing again, like we know this code will do, to get new jobs and opportunities, significant tax relief [is needed] for the middle class.”