The House-Senate conference committee trying to reconcile the differences between the House and Senate tax bills announced that an “agreement in principle” has been reached.
While a big step forward toward passage, it is likely that there will be some nitpicking, especially by some GOP senators whose vote for passage was contingent on specific issues addressed in the final bill.
Senate Finance Committee Chairman Orrin Hatch (R-Utah) told reporters about noon Wednesday of the deal between Senate and House negotiators on taxes.
“We’re going to talk to our members of conference about it at noon,” said Sen. John Cornyn (R-Texas).
Senate Republican leaders say they have the votes to pass the legislation next week.
“I’m confident we’ll pass the bill next week,” Cornyn said. “Earlier is better.”
GOP sources familiar with the conference committee talks said negotiators are now just cleaning up some of the details on paying for last-minute changes to the bill, which would lower the top individual tax rate to 37 percent and set the corporate tax rate at 21 percent, according to a person briefed on the package.
The negotiations went surprisingly well and fairly quickly. It’s amazing what Republicans can do when catastrophe is staring them in the face at next year’s midterm election.
The final bill will look more like the House bill than the Senate, which is good for business:
The legislation will repeal the federal mandate requiring people to buy insurance — a core piece of ObamaCare.
The bill also would give some relief to people in high-tax areas by allowing them to deduct up to $10,000 in state and local property or income taxes.
The deduction for pass-through companies will be set at 20 percent, somewhat lower than the 23 percent included in the Senate-passed bill. But that will be offset by lowering the top individual income rate to 37 percent from its current level of 39.6 percent.
Johnson said the pass-through rate will include trusts and establish an effective top tax rate of 29.6 percent.
Negotiators also knocked out a House-passed provision that would eliminate the student loan interest deduction. They also killed a provision that would tax tuition waivers received by some grad students.
“Folks who are in grad school will feel pretty good about the final result,” said Sen. Mike Rounds (R-S.D.).
Meanwhile, a provision to set a corporate alternative minimum tax — which would have raised $40 billion over 10 years — has been stripped out.
Democrats can’t complain about not being part of the negotiations. Not a single one of them backed the tax bill in either chamber.