Part 2: Side by side...The Senate and House tax plans what they mean to businesses:
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.
Here's what the business end of the equation looks like:
Cuts the corporate tax rate to a flat 20% with limited deductions (this is identical to the House plan except...it doesn't kick in until 2019...the House plan kicks in starting in 2018)
Cuts the pass-through rate for businesses (S corps, Limited partnerships, etc.) to what appears to be 29.8% (this was another Friday change in the Senate to bring the rate below 30%...House plan caps at 25% - this will need to be reconciled)
Eliminates the sole proprietor loop hole used by self-employed individuals. If pass through eligible business owners take a salary, that money is subjected to individual tax rates - not pass through rates
Repatriation taxes - one-time tax of 14.5% on cash & 7.5% on assets (half a percent higher on each as compared to the House plan)
It's arguable the differences on business taxes are the biggest sticking point between to House and Senate plans but as I've demonstrated they aren't that severe & I have little doubt that the reconciliation process won't be an overly challenged process. I'm also exceedingly optimistic that we will have meaningful tax reform passed by 2018.