The federal tax code could be overhauled before Christmas. On Wednesday, Republican leaders agreed on some key issues in the proposed tax bill and it’s just a matter of time before it’s passed. The bill will be known as the Tax Cuts and Jobs Act and it’s now in the conference committee stage where discrepancies between the Senate and House versions will be ironed out.
Reports indicate that Republican members on the committee have reached a preliminary agreement to decrease corporate taxes. The agreement will also see the wealthiest Americans get more benefits. Senator John Cornyn told reporters that they were very close to passing the act. The Senator also added that a big portion of contentious issues has already been resolved.
The urgency to pass the bill before Christmas seems to have been triggered by the Republican loss in Alabama. The GOP’s Senate majority was reduced to 51 after Roy Moore failed to clinch the seat in the just concluded special elections. The Party feels that it’s very important to get over with the tax reform bill before the upcoming midterms. After all, losing Alabama, a predominantly red state, suggests that the GOP will have it very difficult to retain its majority.
There is a sense of optimism among Republicans in the Capitol that finally a legislative victory will be achieved. Senator Orrin Hatch, chairman of the House Finance Committee and a member of the conference committee said that GOP members got a pretty good deal. The deal was also presented to the president on Wednesday. Trump approved it and noted that he was ready to sign it once it passes through the Senate.
However, the official text of the compromise legislation will not be released until the end of the week. Republicans are confident that a vote will be held on Monday and Tuesday. The bill is also expected to get to Trump’s desk by the end of next week for signing.
Although it’s still not guaranteed that the proposed act will pass, it is clear that most Republicans are now reading from the same script. A number of big changes have been made to accommodate issues raised by various lawmakers.
Republicans are expected to cut the corporate tax rate from the current 35% to 21%. The top individual bracket will also see a drop from 39.6% to 37%. The estate tax will be retained too. However, the GOP has raised the threshold of qualification from $5.6 million to $11 million. The proposed legislation will likely have major changes on the types of deductions that can be taken by corporations and individuals.
Republicans can only afford two defections so the bill can pass. There is already some pushback from a few GOP members but it’s unlikely that they will vote NO. Senator Marco Rubio, for example, raised concern on Twitter with the child tax credit. Monday will definitely be the big day and Trump is hoping that last minute surprises will be avoided.