Senate Republicans unveiled their version of tax reform legislation last Thursday. They followed the same general approach as the House bill, but with specific differences in the details.
For starters, the Senate broke with the House, and President Trump, by delaying corporate rate reductions to 20 percent until tax year 2019. The House would cut rates to 20 percent in tax year 2018.
On “Itemized Deductions,” The Senate version also eliminates the state and local tax (SALT) deduction, with some exceptions. Conversely, the House retains state and local property tax deduction, capped at $10,000, but eliminates the remainder of the state and local deduction, with some exceptions.
When it comes to the “Standard Deduction,” the Senate and House versions differ only slightly. For the Senate, it’s $12,000 for single filers, $18,000 for household heads, and $24,000 for joint filers, indexed for inflation. For the House, it’s $12,200, $18,300, and $24,400, respectively.
Meanwhile, the House Ways and Means Committee approved its version of the tax legislation.
House Speaker Paul Ryan (R-Wis.) is hoping for House passage of the tax reform bill as early as this week. He has vowed not to “rubber stamp the Senate bill,” but he has indicated he would lead a good-faith effort to work out House and Senate differences, once the bills are referred to conference committee for negotiation and reconciliation.
Senate passage of tax reform legislation is uncertain at this point. Senate Majority Leader Mitch McConnell (R-Ky.) already had his work cut out for him. With a razor-thin Senate GOP majority and a handful of reluctant Republicans, it was roundup time. The recent sexual assault allegations against Alabama Republican Senate nominee Roy Moore have made McConnell’s challenge even more daunting.
Constitutionally, it is true Moore is innocent until proven guilty of several sexual assault allegations. It is also irrelevant. Leading Republicans are racing to distance themselves from him. The media and public opinion have already convicted him.
As for Democrats, they are giddy over the prospect of picking up a Senate seat from the self-proclaimed “Heart of Dixie.” If that happens next month, before the full Senate votes on tax reform, McConnell’s challenge becomes gargantuan.
Reflecting on the rival Republican tax reform proposals, and my own experience as an Army Legislative Liaison Officer working in the Pentagon and on Capitol Hill, I’m reminded of the old aphorism, “Laws are like sausages. It’s better not to see them being made.”
Let us all hope ultimate tax reform tastes better than it looks so far.
Retired Army Col. Thomas B. Vaughn can be reached at email@example.com.