After passing a budget in October and fumbling with healthcare reform, Republican lawmakers on Capitol Hill are under pressure to pass new tax reform before the end of the year and later today, the Senate will likely unveil their own tax reform proposal.
The Senate tax proposal released today comes after the House tax reform plan, released on November 2nd, shows that it lowers the number of tax brackets from 7 to 4, lowers the corporate tax rate to 20 percent, repeals the Alternative Minimum Tax, allows for homeowner’s interest deduction on existing mortgages and maintains them with newly purchased homes up to $500,000, and permits a deduction of state and local property taxes up to $10,000.
The estate tax exemption under the House plan increases to $10 million, up from $5.49 million, and is entirely repealed after 6 years.
The Senate tax reform proposal unveiled later today is expected to take a different approach with the estate tax and the deduction with state and local taxes which remains popular in high population states such as California and New York.
The Senate proposal may also retain the number of tax brackets at 7 rather than lowering the bracket number to 4 under the current House plan.
The House tax reform plan, estimated by the Joint Committee on Taxation to result in a decline of $1.478 trillion in federal revenues over 10 years, is expected to be voted on in the near future and was opened up for markup beginning on November 6th.
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