GOP leadership has just filed its final version of the reconciled tax reform bill. The bill, which had been secret until today, underwent a number of changes throughout the week. Here are some of the key alterations:
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The new tax rates per individual income tax bracket are (example incomes are for married individuals filing jointly):
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10 percent (up to $19,050)
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12 percent (above $19,050 up to $77,400)
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22 percent (above $77,400 up to $165,000)
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24 percent (above $165,000 up to $315,000)
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32 percent (above $315,000 up to $400,000)
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35 percent (above $400,000 up to $600,000),
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37 percent (above $600,000).
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The child tax credit will be raised to $2,000, with $1,400 of that amount being refundable. It will phase out for families making at least $400,000, a massive change from current policy which phases out the credit for individuals making $75,000 and couples making $110,000.
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The state and local tax (SALT) deduction is capped at $10,000, which can be from any mix of local taxes, rather than just property.
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The mortgage interest deduction for second homes, a policy widely reviled by economists and conservatives, has been restored.
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The Alternative Minimum Tax (AMT) has been repealed for corporations, but it will continue to apply to individuals, though with narrowed eligibility. The details of the narrowing are not yet clear.
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The corporate income tax rate is now 21 percent; this will take effect next year.
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The estate tax will remain, but with a doubled exemption. For example, under current policy, the exemption for estate tax in 2018 would be $5,600,000, so under the new plan that would be $11,200,000.
It has not yet been announced whether the bill will go to the House or the Senate first, but with a Senate majority currently firm, the issue of timing around Senator McCain’s medical treatment is less pressing.
Debate and voting is set to begin next week.