Where we are
The Senate on December 6 voted 51-to-47 to go to conference committee with the House, thus setting the stage for tax reform negotiations between the two chambers. The House on the evening of December 4 held its vote to head to conference with the Senate, which was approved 222-to-192
Once the conference is fully formed with Republican and Democratic lawmakers from both chambers, the goal is for the two tax reform bills to be merged into one, unified conference report. The Tax Cuts and Jobs Bill cleared the House on November 16 and the Senate passed its amendment to the legislation in the early morning hours of December 2.
The “when” and “who” aspects of the Senate’s representation at conference has not yet been decided. SFC Democrats and staff continue to maintain that the GOP tax plan is more geared toward wealthy individuals and corporations, saying that it is a “really bad bill for the middle-class,” while also criticizing the claimed partisan practice from which it has been crafted.
“The truth is, Republicans from the House and Senate are hashing out their differences right now behind closed doors. The “word” on Capitol Hill is that much of the bills’ redrafting will occur behind the scenes, rather than in the conference itself. Lawmakers are not expected to meet in conference until the week of December 11. Republicans leadership in both the House and Senate maintain that the goal for accomplishing tax reform is to send a bipartisan bill to President Trump’s desk for enactment by the end of the year.
A number of differences between the House and Senate bills will have to be reconciled during the conference committee. For example, the House bill repeals the Alternative Minimum Tax (AMT), while the Senate maintains the AMT for corporations and raises the exemption on the individual AMT. In addition, the House proposes four individual income tax brackets and the Senate proposes seven. Moreover, the Senate’s individual tax relief provisions are temporary because of budget constraints, with GOP expectations that Congress will make them permanent before they would expire.
Additionally, the Senate bill repeals the Patient Protection and Affordable Care Act’s individual mandate penalty, and the House bill does not. The House is reportedly expected to agree to this provision, however. Other areas of difference include provisions concerning the estate tax, pass-through tax rate, and mortgage interest deduction. Further changes to the state and local tax deduction may also be negotiated.
We will continue to monitor the progress of this bill and its impact to you as it moves rapidly through conference. If you have any questions regarding this bill and its direct impact on you, please do not hesitate to contact us.