By Jessica Domel
Multimedia Reporter
After hours of negotiations, House and Senate Republicans Wednesday announced they have come to an agreement on a single piece of tax reform legislation to send to the president.
The deal combines portions of the House-passed plan for tax reform and the legislation passed by the Senate earlier this month.
According to POLITICO, the agreement would leave the estate, or death, tax intact, but would double the exemption for individuals to $11 million. For families, the exemption would increase to $22 million.
The corporate tax rate would be 21 percent, which is higher than both the Senate and House approved plans, while the top tax rate for individuals would be 37 percent, lower than the original congressionally-approved plans.
“Congress has reached an agreement on tax legislation that will deliver more jobs, higher wages and massive tax relief for American families and for American companies,” President Donald Trump said Wednesday. “The typical family of four earning $75,000 will see an income tax cut of more than $2,000, slashing their tax bill in half. It’s going to be a lot of money. You’re going to have an extra $2,000.”
A 20 percent deduction would be allowed for pass-through businesses.
“The rate on the corporate side is going to be a big, big boon to the economy,” Congressman Mike Conaway told the Texas Farm Bureau (TFB) Radio Network at the TFB Annual Meeting earlier this month. “So if we can grow the economy better, then people will have more money to buy higher quality food. I think it’s going to be a big deal for America, for our economy, but especially for our farmers and ranchers out there who have seen some hard times over the last four or five years. If we can grow this economy better, then I think we’ll all feel the positive effects of that.”
Businesses would reportedly be able to immediately write-off investments for the next five years.
“Another major element of this provision is that every business in America is allowed to immediately expense capital expenditures. If you buy a new tractor, if you invest in new equipment, immediately instead of expensing that over a period of years, you can expense it over night,” Senator Ted Cruz said at the annual meeting. “That’s designed to lower your costs, to impact the bottom line and let you invest more in growing your farm or ranch.”
The agreement would also end the healthcare mandate passed under the Obama administration.
Cutting the individual mandate would save the federal government $338 billion, Cruz said. The savings will reportedly be used to double the Child Tax Credit to $2,000 per child.
“If you’re a young family, you’re raising your kids, that’s real money in your pocket for working Americans,” Cruz said.
According to the Houston Chronicle, taxpayers will be able to deduct out-of-pocket medical expenses and graduate students would be exempt from paying taxes on their tuition stipends.
The deal will also include a $750,000 cap for interest deductions on mortgage debt.
The text of the deal has not yet been made available.
The Senate is expected to consider the legislative text of the deal as early as Monday.
Congressional Republicans hope to have the bill on the president’s desk for his consideration before Congress leaves for the Christmas break.