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Spokane, Washington  Est. May 19, 1883

House tax primer: The latest GOP plan set for Thursday vote

The House of Representatives is set to vote Thursday on an ambitious overhaul of the nation’s tax system, while Senate Republicans have drafted their own proposal.

The House plan has remained relatively unchanged since it was unveiled the first week of November, but a few amendments have changed some provisions that initially drew criticism. Here’s a rundown of what each plan would do.

Tax brackets and standard deductions

The Senate plan keeps seven tax brackets, as under current law, while the House plan consolidates them down to four.

Tax rates under the Senate plan would be lower or equivalent to current rates. The bottom rate would remain at 10 percent and the next bracket would fall from 15 to 12 percent. The top bracket would also see a cut, from 39.6 percent to 38.5 percent.

Both plans nearly double standard deductions, to $12,000 for individuals and $24,000 for married couples.

Child and family tax credits

Both bills expand the child tax credit and raise the income threshold at which it starts to phase out.

The House bill expands the credit to $1,600 per child and begins to phase it out for married couples making more than $230,000. The Senate bill expands the credit to $2,000 per child, with a phaseout beginning at $500,000 of a couple’s income.

Other deductions and credits

The House bill originally got rid of a tax credit for adoption but added it back in after objections from some GOP lawmakers. But the bill still eliminates deductions for high medical expenses and student loan interest. The Senate bill would leave the adoption credit, as well as those deductions, intact.

The mortgage interest deduction and deduction for state and local taxes would be repealed under the Senate plan, while the House bill has compromises on both.

The House bill would allow a deduction of up to $10,000 for property taxes and would allow home mortgage interest to be deducted on the first $500,000 of debt on a home.

Obamacare mandate

The Senate bill repeals the Affordable Care Act requirement that individuals buy health insurance coverage. Currently, the mandate is enforced via a tax penalty for people who fail to purchase coverage.

The House bill does not touch the mandate.

Estate taxes

Both bills would double the exemption for the estate tax, to about $11 million for an individual and $22 million for a couple.

The House bill would completely repeal the estate tax starting in 2025, while the Senate bill would simply index the exemptions to inflation.

Corporate tax rate

Both bills would cut the corporate tax break to 20 percent from the current 35 percent. The Senate bill would make the cut a year after the bill passes, while the House bill would do it immediately.