Part 1 Side by side...The Senate and House tax plans what they mean to you:
Bottom Line: After the Senate finally approved sweeping tax reform, the biggest package of tax changes since the Reagan reform, in the wee hours Saturday morning - we're now set for the final stages of the process. Next up reconciliation with House and Senate leaders to iron out the differences in the bills. Despite the claims by some that there are vast differences between the bills and there could still be hang-ups that prevent a final version that could pass both chambers. That simply isn't the case. At least in my opinion after wading through the original plans (which I broke out for you in two, two-part stories), and accounting for the final changes and amendments to the Senate plan. I kid you not that this is how Friday night went at my house...
Ashley and I wrapped up work, went out back to enjoy wine, cheese and crackers. CSPAN 2, which I had on in the back ground during final arguments in the Senate, was still on and I sat back down at my desk to begin working on the changes and amendment votes. For the next several hours Ashley & I followed the changes while accounting for the amendments. My favorite amendment to gain 11th hour inclusion was one proposed by Ted Cruz which expands the federal 529 college savings accounts to education at any level...meaning that parents would have the opportunity to use the accounts and money saved in them for any level of education. With a public education system that's been in provable decline for 37 years and counting - I'm ecstatic about that proposal. It passed with 50 votes with VP Mike Pence breaking the tie (the only time that was required Friday night/Saturday morning). Without further ado, after an additional several hours of additional work breaking down the Senate changes and at least eight hours of CPSAN2 (aren't you glad you weren't at my house Friday night), here's the latest and what it means to you...
Individual taxes:
There are still seven Senate tax brackets (compared to four in the house plan): 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%
There is still a near doubling of the standard deduction (just like the House plan): Along with other changes in the plan the net effect would be much simpler tax filing for most who currently itemize. 32% of Americans currently itemize. That would likely drop to only around 6%
End of the individual mandate
Property taxes would be deductible up to $10,000 in either plan (this was one of the biggest additions to the Senate plan on Friday) - it's now identical in both plans - this will make the final version of the tax plan
Arguably the second biggest change on Friday in the Senate was the retention of the AMT (alternative minimum tax). The House plan ended it. This is one of the largest remaining differences between the two plans & it's uncertain what the outcome will be
Raises the cap for the Estate tax to kick in to nearly $11 million (double the current threshold), the House plan kills the estate tax & this will also need to be reconciled
Doubling of the child tax credit from $1,000 to $2,000 (House plan calls for increase to $1,600)
New "dependent tax credit" - this is for adult dependents and doesn't currently exist - it's $500 in the Senate plan and $300 in the House plan
There are also a few other items in the plan of interest for some including a doubling of the teacher expense deduction and for medical devices
Median income is currently $44,668. Using standard deductions...This person pays $5,319 in federal income tax.
The Senate plan: $3,730 (savings of $1,589 starting in 2018)
The House plan: $3,920 (savings of $1,398 starting in 2018)
Once again. Everyone who pays federal income tax benefits meaningfully from tax reform period. Anyone who suggests otherwise is lying to you.