What's going on with tax reform? Well, the House passed their version of tax reform. The Senate is still working on theirs. If both version pass, they have to rewrite the two bills, so they match. Then, both the House and the Senate have to vote on them, again.
I think it'd be easier if they just, you know, wrote a bill once, rather than three times, but then again, I'm not a politician. Let's have some fun and see what the differences between the bills are! I'm getting my info from this news website.
1. The Senate says to keep all seven tax brackets the way they are. The House condenses them into four. I talked about the House's bracket plan earlier. I happen to like it, because it's simpler, and it moves the goal posts for the next tax bracket farther away from me. People who got moved up a bracket don't like it at all. I suspect that either the Senate's version will win out, or a modified version of the House's plan will win (say, one with five brackets, not four.)
2. The Senate says the highest tax rate is 38.5%, while the House says the highest tax rate is 39.6%. Currently, it's 39.6%. I think the House will win this.
3. Standard deduction! The House's standard deduction is $12,200 for a single person, while the Senate's is $12,000. I think the Senate's version will win out. I mean, I'd like the extra $200, but the Senate has tighter rules on fiscal responsibility, and that's a really simple way to make the tax plan gather more revenue.
4. The Senate's version repeals the individual mandate for health insurance. Basically, if you don't have health insurance, you pay a fine, and the fine goes up every year. The House's version doesn't make any changes to the mandate. There was a fairly large blowback to the Senate's plan; news reporters claimed millions of people will stop getting health insurance, without the fine in place to encourage them to do so. Since the Senate got blowback and the House didn't, I'm guessing the House's version will win.
5. The child tax credit is currently at $1000 per child. The Senate doubles the child tax credit, while the House adds $600 to it. They also add a new $300 credit for parents and non-dependent children. The House's version is more complicated, but it's cheaper by $100, so it's more likely to pass.
6. Things I don't understand. The Senate and the House have plans, for things like estate taxes and business types and mortgage interest deductions, which I've never had to deal with. I can't tell which one is better. Obviously, the government gets more money if it limits deductions, but just as obviously, people get furious if they can't deduct as much as possible. I'm thinking the version with the larger deductions will be more popular with taxpayers, as will the version with the longest phaseout period.