The Senate on Wednesday
barreled toward the most sweeping rewrite of the tax code in more than three
decades as the top Republican senator said he was willing to compromise on a
major sticking point for lawmakers from high-tax states such as New York and
California.
The Senate voted 51-47 to
formally begin negotiations with the House in an effort to reconcile their two
tax bills. Days and nights of tough negotiations await.
GOP leaders are pushing to send
a final blended package to President Donald Trump to sign before Christmas.
Republicans see the tax overhaul as a pressing political imperative to preserve
their majorities in Congress in next year's elections.
"The American people
deserve taxes that are lower, simpler and fairer," said Senate Majority
Leader Mitch McConnell, R-Ky. "By voting to go to conference, we will be
one step closer to getting it done."
Before the Senate vote,
McConnell said he favors expanding a deduction for state and local taxes to
enable Americans to deduct local income taxes as well as property taxes.
The proposal is a possible
solution to a standoff with rebellious House Republicans from high-tax states.
The tax bills passed by the House and Senate would end deductions for state and
local income and sales taxes, while allowing only a deduction of up to $10,000
for property taxes.
Several GOP lawmakers from
high-tax states voted against the House bill last month.
"The state and local tax
deduction is not as important to Senate Republicans as it is to House
Republicans," McConnell said on the Hugh Hewitt radio show.
"There's some in the
House who would like to see that applied not just to property, but to income
tax, you know, where you can sort of pick which state and local tax you want to
deduct," McConnell said. "That sounds like a kind of reasonable
idea."
The House and Senate bills
both would provide steep tax cuts for businesses and more modest tax breaks for
families and individuals. The tax cuts in each bill add up to about $1.5
trillion over the next decade.
Rep. Kevin Brady, R-Texas,
said negotiators are looking at several options to help people who live in
high-tax states, including expanding the state and local tax deduction to
include income taxes.
"That's one of the
options that our lawmakers have brought to us from California and New York and
Illinois and others. So yes, we are looking at it," said Brady, who is one
of the lead negotiators for House Republicans.
Brady said lawmakers are also
considering adjusting the tax rates, adjusting the tax brackets, increasing the
child tax credit and eliminating the alternative minimum tax, which was
intended to ensure that high-earners pay at least some tax.
The House package eliminates
the AMT; the Senate bill reduces the number of people who would pay it.
The House bill increases the
child tax credit from $1,000 per child to $1,600; the Senate bill increases it
to $2,000.
