WASHINGTON—The Senate Finance Committee has issued the details of its tax reform plan, which bears significant differences to the tax package unveiled last week by the House Ways and Means Committee
Senate Finance Committee Chairman Orrin Hatch, R-Utah, praised the Senate "Tax Cuts and Jobs Act" as "fiscally responsible tax relief for the middle class" in a Nov. 9 statement.
"Helping Americans keep more of their hard-earned dollars, find new jobs and increase their take-home pay has always been at the heart of this effort," Hatch said. "And now, with a willing president, we have an opportunity to turn this effort into a reality."
Like the House tax bill, the Senate version would reduce the corporate tax from 35 to 20 percent, but postpone that reduction until 2019.
It also would double the current exclusion for the estate tax, to just under $11 million, but would not phase out the tax as the House bill does.
Both bills would nearly double the current standard deduction, to $12,000 for individuals and $24,000 for couples.
The Senate bill would eliminate all state and local tax deductions, whereas the House version would allow up to $10,000 in property tax deductions. The Senate bill also would allow medical expense deductions, which the House legislation would eliminate.
For pass-through companies—those in which the owners are taxed as individuals, rather than the company being taxed at the corporate rate—both bills would offer a 25 percent tax rate. But the Senate said it would have rules surrounding the pass-through rate that differ from those of the House bill. Small business advocates criticized the House pass-through rules as too restrictive.
Like the House bill, the Senate package would preserve the ability of small businesses to deduct interest on loans and fully expense new equipment.
Hatch said the Senate Finance Committee would begin markup of its tax package Nov. 13. The House Ways and Means Committee has been working on its version of the tax reform plan since Nov. 6.