Tax split between House, Senate poses challenge
The House and Senate tax overhaul plans are broadly similar, but crucial differences are creating headaches for Republican leaders determined to keep myriad interest groups and factions of the GOP satisfied.
Here’s a rundown on the major differences between the House and Senate bills:
The Senate measure keeps the current number of personal income tax brackets, seven, though it changes the rates to 10, 12, 22.5, 25, 32.5, 35 and 38.5 percent. That last top bracket for the wealthiest earners carries a higher rate of 39.6 percent under current law.
The House bill goes further toward simplifying the tax system. It shrinks the number of brackets from seven to four, with rates of 12, 25, 35 and 39.6 percent.
The Senate bill would eliminate a taxpayer’s ability to deduct state income taxes and local property taxes. But the final bill may have to closely track a House compromise that provides a property tax deduction of up to $10,000 or else risk a revolt from GOP lawmakers from New York, New Jersey, and California.
Both the House and Senate versions slash the tax rate for corporations to 20 percent from the current 35 percent. The Senate bill delays the rate cut for a year.