Published: Sat, November 11, 2017
Markets | By Erika Turner

Republicans advance tax cut packages through House and Senate

Republicans advance tax cut packages through House and Senate

Sweeping tax legislation from Senate Republicans includes a one-year delay in plans for a major corporate tax cut despite strident opposition from the White House and others in their own party.

State and local taxes: The House bill would allow a deduction for up to $10,000 in property taxes, but end deductions for income or sales taxes; the Senate would eliminate all of them.

Pennsylvania's two USA senators will be among those evaluating the Senate Republican tax plan released Thursday when it heads to a committee hearing next week, and their initial views of that plan diverged sharply as it was rolled out. It's President Donald Trump's top priority and a goal many Republicans believe has grown even more urgent in the wake of election losses on Tuesday that displayed an energized Democratic electorate.

Child tax credit: Increases from $1,000 to $1,600 in House bill, $1,650 in Senate bill per child.

The House is expected to vote on its tax measure next week. The current threshold for 2018 is $5.6 million of individuals and $11.2 million for a couple. According to Politico, Rep. Tom MacArthur (NJ) is now likely to vote in favor of the House bill because of data showing that most people living in his district deduct less than $10,000 in property taxes per year and thus, in theory, their property tax bills would remain fully deductible. As for the hard-fought compromise, he said, "I think it'd be hard not to have it in the final bill".

Lowering the corporate rate is a centrepiece of the Republicans' plan to cut taxes - an effort that is anticipated to get more complicated once the Senate reveals legislation said to greatly diverge from the House's measure. But the Senate already seems unlikely to meet that deadline because of complex rules governing how it must consider the tax bill.

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Both bills propose lowering corporate tax rates, increasing the standard deduction for individuals, removing numerous current tax deductions, and encouraging US companies to bring back revenues parked overseas. "PEPLT007788-topic.html" class="local_link" >Bob Casey, who along with Toomey serves on the Senate Finance Committee that next week will debate amendments to the bill, disagreed with that assessment.

"The president would like this to go into effect right away", Treasury Secretary Steven Mnuchin said Thursday on Fox Business Network.

Senate Republicans rolled out their giant tax reform bill on Thursday. The Senate bill contains no such provision. Both would drastically reduce the corporate tax rate and also lower rates for individuals, while eliminating deductions claimed by many people. The rates would be 10%, 12%, 22.5%, 25%, 32.5%, 35%, and 38.5% under the new bill.

Student loan interest: Deduction eliminated by the House bill; left intact by the Senate. Both versions would retain an adoption tax credit that had initially been eliminated in the House bill, but that adoption advocates fought to restore. This would help the bill's immediate deficit impact.

Casey charged that Senate Republicans should reach out to Democrats to work on a bipartisan bill that would "cut taxes for the middle class and small businesses in order to grow wages and create jobs".

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