Senate Republicans Roll Out Tax Plan

But Democrats have called Republican tax reform measures giveaways to the wealthy and corporations. And the nonpartisan Tax Policy Center says the House plan would eventually raise taxes for about 25 percent of Americans.

Both GOP plans slash the top corporate tax rate from 35 percent to 20 percent, although the House proposal cuts the rate in 2018, the Senate’s in 2019.

Other similarities and differences in the House and Senate versions include:

• Tax brackets. Both proposals would revamp individual income tax brackets.The House would establish four — down from the current seven — keeping the top bracket at 39.6 percent and setting new tax rates at 12 percent, 25 percent and 35 percent. The Senate plan would lower the top rate to 38.5 percent and set other brackets at 10 percent,12 percent, 22.5 percent, 25 percent, 32.5 percent and 35 percent.
  
• Standard deductions. Both plans would end personal exemptions, currently $4,050 for each taxpayer and each dependent they claim. Instead, standard deductions would rise from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples.
• Alternative minimum tax. Both plans would repeal this tax, which generally hits high-income earners.
• 401(k) plans. Both plans would preserve these retirement plans, which allow workers 50 and older to contribute up to $24,000 a year in pretax income.
• Student loan interest. The Senate plan would keeps a tax credit that allows taxpayers to deduct up to $2,500 annually in student loan interest. The House plan would eliminate it.
• Child tax credits. The Senate proposal would increase the child tax credit to $1,650, up from the current $1,000. The House plan would raise the credit to $1,600.
• Estate taxes. Both plans would raise the threshold on what is a taxable inheritance from $5.5 million to $11 million. The House plan would repeal the estate tax after 2023; the Senate would keep it.
• Other tax breaks and credits. Unlike the Senate plan, the House would end tax credits, worth up to $7,500, on plug-in electric vehicles. The Senate measure would maintain the alimony deduction; the House proposal would kill it. The House plan also would eliminate the moving expenses deduction, while the Senate would allow some deductions for the military.

The House could vote on its tax bill next week, and the Senate Finance Committee will begin considering its measure Monday.

“The House will pass its bill, the Senate will pass its bill and then we will get together and reconcile the differences, which is the legislative process,” Ryan told reporters this week. “And that’s how this process will continue.”