- The deal would lower the top tax rate to 37%, a push by House Republicans
- The deal also drops the corporate tax rate to 21%
(CNN)House and Senate Republicans have struck a tentative deal on a tax bill Wednesday, a major step in ensuring the GOP majority is on its way to deliver an overhaul of the US tax system by the holidays.
- The corporate rate would be reduced to 21%, from 35%. That is an additional point added from the 20% originally proposed in the House and Senate versions. It would take effect in 2018.
- The top individual tax rate would be set at 37%, down from the 39.6% proposed in the House and 38.5% in the Senate.
- The State and Local Tax deduction will be expanded, beyond just property taxes, to include income tax. It would be capped at $10,000.
- The corporate alternative minimum tax, included at the last minute in the Senate version, would be fully repealed.
- The individual alternative minimum tax would remain, but the threshold would be tweaked to exclude any individual under $500,000 or family below $1 million.
- The mortgage interest deduction threshold -- dropped to $500,000 in the House and left untouched in the Senate -- would be set at $750,000.
- The rate for pass-through income -- business entities like s-corporations and partnerships that pay taxes through the individual side -- would be determined by a 20% deduction, 3% lower than the Senate version.
- The estate tax exemption would be doubled, but the tax would not be repealed entirely, as it was in the House proposal.
- The Obamacare individual mandate to have health insurance would be repealed.
- A House provision that proposed taxing graduate school tuition is not included in the final deal.
- Medical expense deduction
- Tax-free graduate school tuition waivers
- Private activity bonds
- Student loan interest deduction
- Teacher spending deduction