Opinion: House and Senate should find compromise on tax reform
EDITOR'S NOTE: Boris Epshteyn formerly served as a Senior Advisor to the Trump Campaign and served in the White House as Special Assistant to The President and Assistant Communications Director for Surrogate Operations.
WASHINGTON (Sinclair Broadcast Group) - There are some very significant differences between the bill that just passed in the House of Representatives and the version under consideration in the Senate. Let’s take a look at just some of them.
First, the House bill allows for taxpayers to deduct from their federal taxes up to $10,000 paid in state and local taxes. The Senate proposal discontinues the deduction altogether. Republican members of the House maintain that getting rid of the SALT deduction, as it is known, is a non-starter as that disproportionally hurts larger states such as New York, New Jersey and California.
Second, the House tax plan phases out the estate tax – the death tax – over six years. The Senate bill keeps the tax fully in place. Ending the death tax was a big part of the GOP agenda during the 2016 election and before that. It represents double taxation and an undue burden on family owned businesses like farms and ranches. Republicans will have some explaining to do to voters if the death tax is not touched.
Third, the House plan cuts the numbers of individual tax brackets to four and permanently lowers rates for them. The Senate version keeps seven brackets in place and temporarily cuts rates for those brackets, with the cuts expiring in 2025. The corporate rate goes down to 20 percent in both plans, but the Senate delays the cut until 2019. Cutting the corporate rate is the very crux of tax reform, but a year delay should be acceptable to all sides.
Here is the bottom line: I expect for a compromise bill to be hammered out between the Senate and the House. There is middle ground to be had on all points of tax reform except for a drastic, permanent, cut of the corporate tax rate.