Tax split between House Senate poses a big challenge

Sep 19, 2019 fuhunxpj

first_imgWASHINGTON — 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. And then there’s the ambitious timetable they’ve set of finishing in time to get legislation to President Donald Trump by Christmas.The most politically challenging decisions involve dealing with popular and widely used tax deductions, structuring tax cuts for business and balancing personal income tax rates between middle-class families and the rich.All of these decisions come against a generous — but firm — 10-year, $1.5 trillion cap on the measure’s cost to the federal deficit. Both House and Senate have adopted accounting gimmicks to squeeze tax cuts that appear larger down to fit that restraint.Trump’s enormously expensive demand for a cut in the corporate tax rate to 20 percent — from the current 35 percent — is a big complication, as is unrest among House Republicans hailing from affluent suburban districts who are upset over the proposed loss of the deduction for state income taxes.Here’s a rundown on the major differences between the House and Senate bills:INDIVIDUAL TAX RATESThe 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.last_img

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