What will our taxes look like in the next year?

December 19, 2017 | Tax Advice

The House and Senate conference committee is expected to finalize its committee report for signatures by Friday morning, December 15. Bipartisan conferees will have the choice to sign the committee report between 10 a.m. and noon, committee conference chair Kevin Brady, R-Tex., told reporters on December 14. Text of the tax bill is expected to be released after the conference report is signed.

GOP Support

The 29-member bipartisan conference committee requires only a majority of Senate and House signatures to finalize the committee report. Republicans alone have enough signatures to approve the committee report without Democratic support, thus allowing for expected floor votes next week in the Senate and House.

However, Sen. Marco Rubio, R-Fla., may throw an unexpected curve ball toward GOP leadership’s plans. He announced on December 14 that he will not support the tax bill without a larger increase to the child tax credit. Other key votes that remain uncertain include Sens. Bob Corker, R-Tenn., and Mike Lee, R-Utah. Senate Republicans, holding a slim majority, can only afford to lose two GOP votes.

“Tax negotiators didn’t have much trouble finding a way to lower the top tax bracket and to start the corporate tax cut a year early. Adding at least a few hundred dollars in refundable cuts for working families that seem to always be forgotten isn’t hard to do either,” Rubio said in a tweet.

White House

According to White House Press Secretary Sarah Huckabee Sanders, Rubio should be pleased with the progress already made on the child tax credit front. “We’re really proud of the work that we’ve done already up until this point with Senator Rubio, already doubling the Child Tax Credit, taking it to $2,000 per child,” Sanders told reporters in a December 14 press briefing. “We’re going to continue working with the senator. But we think we’ve made great strides and, frankly, pretty historic movement in terms of the child tax credit.”

Highlights

Certain provisions of the tax bill expected to be unveiled on December 15 looked even more likely on the evening of December 14. Those provisions within the unified GOP tax bill include the following; however, any of these may be revised until the final conference committee report is signed:

  • The corporate rate would be cut to 21 percent, beginning in 2018;
  • The top individual tax rate is expected to fall to 37 percent;
  • A 20 percent deduction would be available for passthrough income;
  • A $750,000 cap, lowered from the current $1 million, would be applicable to the mortgage interest deduction;
  • The state and local tax (SALT) deduction would be repealed, except for property taxes, which would be allowed up to $10,000.

By Jessica Jeane, Wolters Kluwer News Staff