- Both Senate and House Republicans have rolled out their versions of a tax reform bill, named the Tax Cuts and Jobs Act.
- There are substantial differences between the two bills — and then there are President Donald Trump's priorities to consider.
- The gaps among the three GOP groups could become a serious headache for the tax bill.
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Paul Ryan, McConnell, and Trump are on a collision course over the competing GOP tax bills
The two versions of the Tax Cuts and Jobs Act from Senate and House Republicans have substantial differences that need to be worked out.
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Republicans in both the House and Senate took significant steps this week toward a goal of reforming the US tax code. But they also got closer to a potentially acrimonious fight over what their final plan will look like.
As Republicans race toward a self-suggested Christmas deadline to get a bill to President Donald Trump's desk, the House and Senate versions of the legislation contain key differences. And many of Trump's priorities for the tax plan seem to be missing in either one or both of the bills — especially the Senate's.
While House and Senate Republicans and the White House collaborated on a unified framework for the tax overhaul in September, congressional dynamics and the pressure to secure a signature legislative achievement could make solving the differences an intense intraparty fight.
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House v. Senate
After the release of the Senate's version of the Tax Cuts and Jobs Act (TCJA) on Thursday, several significant policy differences emerged compared to the House version.
Both bills have the same goal: reducing corporate and individual taxes. But they go about it in vastly different ways.
The Senate bill would maintain the current number of individual tax brackets — seven — but change the rates and income thresholds. The House bill would shrink the number of brackets to four.
The House bill would eliminate many personal deductions and tax credits for things like adoptions and medical expenses, while the Senate bill would keep those elements. The Senate would wait until 2019 to slash the corporate tax rate to 20% from the current 35%, while the House bill would do it next year.
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The reason behind these policy differences: the politics of each chamber
House Republican leaders wrestled for weeks to come up with a compromise on the state and local tax (SALT) deduction to attempt win over members from areas where many constituents take the deduction in large amounts — like New York, New Jersey, California, and parts of Illinois.
Senate Republicans don't have members in any of those four states. So they would rather take the massive amount of revenue from its total repeal to help fit it into a tight budget window.
AshLee Strong, a spokesperson for House Speaker Paul Ryan, told Business Insider that the two chambers will work out the differences in a conference committee.
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