Republicans promised tax reform would be different.
The party, one leader after another insisted, had learned its lesson from its failure on health care, when fundamental policy disagreements split the Capitol in two and left the Affordable Care Act in one piece. There would be no such meltdown on taxes, and to that end, top Republican officials spent months negotiating what they called a “unified framework” for legislation. “The whole point of all of this is the House, the Senate, and the White House are starting from the same page and the same outline, and tax writers are going to take it from there,” Speaker Paul Ryan said in September.
On Thursday, however, the Republican majorities in the House and Senate once again veered in separate directions on their foremost legislative priority. In the House, the Ways and Means Committee approved and sent to the floor a tax bill that immediately reduces the corporate rate to 20 percent, repeals the estate tax by 2024, collapses seven individual income brackets to four, and scales back popular tax deductions for mortgage interest and medical expenses.
Senate Republicans, meanwhile, unveiled their own tax plan, which contains key differences: It would delay changes to the corporate rate to save money, maintain the estate tax and the seven income brackets, and keep the mortgage-interest and medical-expense tax breaks where they are. But while those differences address political challenges in the House bill, the Senate plan introduces a few of its own: namely, by reducing the top marginal tax rate for the wealthiest Americans and completely eliminating the deductions for state-and-local taxes, known as SALT. That latter change could make the bill politically untenable in the House, where Republicans representing high-tax states already demanded a compromise keeping a deduction for property taxes capped at $10,000.