Senate GOP Unveils Tax Bill With More Pain for Blue States

Senate GOP Unveils Tax Bill With More Pain for Blue States

Senate GOP Unveils Tax Bill With More Pain for Blue States

The Senate plan largely overlaps with the House proposal, but does not repeal the estate tax and leaves the mortgage interest deduction unchanged. The plan would also preserve the earned income tax credit and the home mortgage interest deduction.

The move means homebuyers would still to be able to deduct interest payments on loans of up to $1 million as permitted under current law.

Much of this sharp decline can be explained by the fact that almost 1.8 million New Jersey households would no longer be able to write-off their state income or sales taxes on their federal tax forms, as these deductions would be repealed entirely under the bill. Delaying that reduction would lower the cost of the bill to the Treasury, but the delay is opposed by the White House and some Senate Republicans.

The Senate version also would delay a drop in the corporate tax rate from 35 percent to 20 percent by one year after passage, unlike the House version, which would have the cuts kick in right away. This is about getting the economy going.

That's according to a Senate GOP source familiar with the details on the legislation being released Thursday afternoon.

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The House and Senate bills are broadly similar in their general outlines.

Republican leaders' goal is for Congress to send legislation melding both House and Senate versions to Trump by Christmas, in hopes of protecting their congressional majorities in next year's elections. The House bill would entirely eliminate the estate tax, while the Senate version would retain it while doubling the exemption level. It would also lower the tax rate on "hard-earned business income of Main street job creators" to no more than 25 percent, the talking points say. Both versions would retain an adoption tax credit that had initially been eliminated in the House bill, but that adoption advocates fought to restore.

The Senate would boost the child tax credit to $1,650 and raise the income threshold for the measure.

Democrats are angrily opposed to the GOP rewrite, arguing it's a giveaway to the rich and corporate America. But supporters of the measure say the loss would be offset by other provisions in the bill. At least five different tax policy models-including those maintained by the official scorekeepers at the Joint Committee on Taxation as well as at ITEP, TPC, Tax Foundation, and AEI-have been used to analyze the plan already, and all five are in agreement that some taxpayers will pay more if the bill is enacted. It also can not add to red ink beyond the first 10 years without facing the same fate.

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