Revenue estimates reveal key differences between House and Senate
TAX ALERT |
The House and Senate tax plans are full of complex rules, arcane exceptions, and cross-references that are sometimes difficult to understand. But the official revenue estimates provide an easier way to get a sense of the significant differences between the bills.
Here are some of the main items.
Corporate and pass-through rate provisions
The House bill cuts the corporate rate at a cost of $1.4 trillion. The Senate bill’s corporate cuts cost only $1.3 trillion because they start a year later.
The House bill cuts pass-through business tax rates at a cost of $600 billion. The Senate pass-through tax reductions cost only $362 billion.
The Senate also takes away $137 billion from the pass-through sector with a new limitation on active losses, for a net boost to the pass-through sector of $225 billion – compared to $1.3 trillion of rate cuts for corporations.
The House ratio of corporate rate benefits to pass-through rate benefits is 2.5/1. In the Senate it is 4/1 – or 6/1 if you include the cut-backs to active pass-through losses.
SALT and home mortgage provisions
The House bill denies state and local tax deductions for individuals, except for $10,000 of real property taxes, and also curbs interest deductions for future mortgages over $500,000. Along with a few other deduction limitations, it raises $1.3 trillion.
The Senate bill eliminates all state and local tax deductions, but keeps the mortgage interest rules as is, except for curbing deductions for home equity loans. Along with a few other deduction limitations it raises $977 billion.
Estate, gift, and GST provisions
The House bill doubles the current exemption amounts, and also repeals the estate and GST taxes after 2024 at a cost of $150 billion.
The Senate bill doubles the exemptions, but does not repeal estate or GST taxes and costs only $83 billion.
Business interest limitations
The House bill’s limitation on business interest deductions raise $172 billion.
The Senate’s limitations raise $308 billion.
The House bill’s international provisions raise $279 billion. The Senate bill’s international provisions raise $154 billion.
The main difference appears to be the repatriation taxes, which raise $294 billion in the House bill, but only $184 billion in the Senate bill.