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Details Of 'Simplified' Senate Tax Bill Start To Leak: 7 Tax Brackets, Scraps All SALT Deductions

As the House tax bill hits the wires, leaked details of the Senate's tax bill are coming out...

There will be 7 tax brackets - considerably more complex than the 3 brackets in the House bill

Senate tax legislation will keep seven tax brackets but alter the rates, GOP Sen. John Hoeven tells reporters.

 

Hoeven says the brackets will be set at 7%, 12%, 22.5%, 25%, 32.5%, 35%, and 38.5% (lower than the current top tax rate of 39.6%)

Hoeven also says the top tax rate starts at $500k for individuals.

GOP Senate leaders on Thursday plan to unveil legislation that would delay cutting the corporate tax rate from 35 percent to 20 percent until 2019, four people briefed on the planning said. That's a major departure from Trump's insistence on immediate tax cuts that he says are necessary to spur the economy.

The one-year delay would lower the cost of the tax bill by more than $100 billion, and negotiators are trying to preserve as much revenue as they can for other changes.

 

But it could also delay decisions by companies to move back to the United States from overseas or prompt them to hold off on other decisions as they wait for the corporate rate to fall.

 

To try to prevent companies from waiting until 2019 to invest, Senate Republicans plan to allow companies to immediately deduct all capital investments in 2018, the people said.

The Senate tax bill would fully repeal state and local tax breaks that have become a hot-button issue in the House, Senator John Hoeven said.

The so-called SALT deductions tend to benefit people in high-tax states. House Republican tax writers ran into opposition from fellow GOP members in states including New Jersey, New York and California when they first proposed to do away with the deductions -- a move that would raise as much as $1.3 trillion over 10 years to help pay for the deep rate cuts the GOP wants to allow.

 

As a compromise, House Ways and Means Chairman Kevin Brady amended his bill to preserve the break for state and local property taxes only -- a deal that would still eliminate the deduction for state and local income taxes or sales taxes.

 

Brady’s suggestion would cap the property tax break at $10,000.

The Senate Bill is said to double the estate tax deduction.

The Senate tax bill would reduce the number of people subject to the estate tax, but leave the levy in place, according to a Republican senator who was briefed on the bill.

 

The House bill would eliminate the estate tax -- a long-sought goal of conservatives -- after 2023.

 

Current law applies a 40 percent tax to estates worth more than $10.98 million for married couples, and half that amount for individuals. The Senate bill would double those thresholds, but leave the tax in place, said the senator, who asked not to be named because the bill isn’t public yet.

The Senate Finance Committee's tax overhaul plan will keep an interest deduction for existing mortgages up to $1m, a break from House legislation currently in committee, GOP Sens. Tim Scott and John Hoeven tell reporters.

The House bill would cap the tax break at $500k for new home purchases.

And finally, Elon Musk wins, a $7,500 tax credit for electric vehicle purchases not changed in Senate tax bill, according to Sen. Dean Heller, R-Nev.

The House tax blueprint would repeal credit that provides $7,500 per electric vehicle tax credit to purchasers.

More details to come later...