Tax Reform Conferees Reach Deal

This week, tax conferees in the U.S. House of Representatives and U.S. Senate agreed in principle on the final version of tax reform legislation. Republican leaders hope Congress will vote on the legislation early next week before sending the completed bill to President Trump’s desk for his signature.

While legislative language for the bill won’t be available until Friday, some details have already emerged. Corporate tax cuts will continue to be the centerpiece of the legislation, with media reports indicating the bill will set the corporate rate at 21%. As for small businesses, there will be a 20% deduction for some pass-throughs, which is closer to the language in the Senate bill.

For personal taxes, the legislation doubles the standard deduction and lowers the top tax rate to 37%, while also making changes to the other income brackets. The legislation would also reduce the cap on the mortgage interest deduction to $750,000 and allow people to take up to $10,000 in deductions for state and local property or income tax. The legislation would also eliminate the Affordable Care Act’s individual mandate penalty.

Read next week’s News & Views e-newsletter for more information and the Big “I” analysis of the final tax bill.

Wyatt Stewart is Big “I” senior director of federal government affairs.