After many hours of discussion on the Senate floor, early Saturday morning the United States Senate secured the 50 votes needed to pass its tax bill. The vote was a close 51-49. The only Republican voting against the bill was Senator Bob Corker of Tennessee. Earlier this week, the tax reform bill passed a major procedural hurdle on Tuesday afternoon, when the Senate Budget Committee approved the bill for a full floor vote. Around midday on Friday, Majority Leader Sen. Mitch McConnell (R-Kentucky) announced that “we have the votes,” setting the field for the vote earlier this morning. This followed heated negotiations with a number of Republican Senators, including Sen. Susan Collins (R-ME), Sen. Jeff Flake (R-AZ), Steve Daines (R-MT), and Ron Johnson (R-WI).
During the consideration of the Senate bill, changes were made to the Senate Finance Committee-reported bill as it raced to the finish line. The differences between the House- and Senate-passed bills will be ironed out by the upcoming Conference committee, as well as technical fixes that exhausted tax staff, aided by outside tax professionals, will identify in the coming days.
Some of the key differences to be ironed out between the House and the Senate include:
- On the individual side
- Estate tax reform: House repeals eventually; Senate increases the exemption
- Mortgage interest deduction: House caps at $500,000 for new homes; Senate leaves it at $1 million which is existing law
- ACA Individual mandate: House has no provision; Senate repeals it
- Temporary tax cuts: House and Senate have different effective sunset dates for individual provisions
- On the business side
- Pass-through business income: House taxes at 25% rate; Senate provides 23% deduction
- Alternative Minimum Tax: House repeals it for individuals and corporations; Senate retains it with increased exemptions for individuals and retains current law for corporations
- Business expensing: House allows full expensing for 5 years; In the Senate, after 5 years of 100% expensing, the rate phases down to 80%, 60%, 40%, and 20% over the next 4 years
Please note that the side-by-side hyperlinked below is a preliminary, working document that will be continuously updated.