The conference committee is “getting very close” to finishing work to reconcile the House and Senate tax reform bills, Sen. John Thune, R-S.D., told reporters December 12, one day before an open meeting of the committee.
“There are a few things that we’re still working through with our House counterparts,” said Thune, one of 18 taxwriters serving on the 29-member conference committee for the Tax Cuts and Jobs Act.
Multiple news sources reported that congressional Republicans were in talks to lower the top individual tax rate from 39.6 percent to 37 percent and set a corporate tax rate of 21 percent, higher than the 20 percent level in both the House- and Senate-passed tax bills.
They also were considering lowering the amount of home mortgage for which homeowners are permitted to deduct interest to $750,000, down from the current $1 million cap, news reports said. The Senate bill left the mortgage interest deduction unchanged from current law while the House bill would allow interest deductions on only the first $500,000 of mortgage debt. (Side-by-side comparison of the GOP tax plans.)
Although Thune predicted the Senate wouldn’t vote on the conference agreement the week of December 11, other Senate and House Republicans, including the House’s top taxwriter, indicated that a compromise would soon be reached.
Anti-base-erosion measures and other international provisions still need to be resolved, but work is on track, House Ways and Means Committee Chair Kevin Brady, R-Texas, said. He suggested that the final international tax system would be a blend of the House and Senate approaches, and that the conference is fine-tuning details in a number of areas.
“People know these provisions, and they’ve been discussed broadly and widely in each of the versions,” Brady said. “We’ve been working hard for six years on this, so it’s not like people don’t know these issues.”
Whether to repeal private activity bonds as the House bill does is still being considered in the conference committee, Brady said, adding that those financing tools are rarely used for infrastructure projects. “There’s agreement that private activity bonds can play an important role, [but] there is discussion about [how] so little of them — about 12 percent — are really used for infrastructure,” he said.
Rep. Lamar Smith, R-Texas, told reporters that during the weekly House Republican conference meeting, Majority Leader Kevin McCarthy, R-Calif., told lawmakers “the goal is to vote on Tuesday,” December 19, but Smith could not elaborate on whether both the House and Senate would consider the final language then.
Sen. Ron Johnson, R-Wis., agreed that Republicans were close to finalizing details on the tax reform bill, but suggested that “we’re still continuing to discuss things” on passthrough taxation issues.
President Trump has scheduled a December 13 speech to promote the tax reform effort. He also is scheduled to host the conference committee members for lunch December 13.
The “final hours” of tax reform talks are here, Rep. Mark Meadows, R-N.C., said. Depending in part on concessions made to help middle-income wage earners and small business passthroughs, he said he’s “willing to look at some sort of compromise” regarding a potential increase in the corporate tax rate.
“But at this point I haven’t seen enough of the details nor the rationale to suggest that anything over 20 percent would be appropriate,” added Meadows, chair of the House Freedom Caucus.
The reduction in the top individual rate could help passthrough businesses, Meadows said, though he added he’d prefer to see it lowered to 35 or 36 percent. On the possible change in the mortgage threshold, Meadows said he supports a higher mortgage interest deduction.
“The truth of the matter is there is no agreement,” he said. “It’s everybody negotiating through the press right now.”
Stephen K. Cooper contributed to this article.
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