By Barry Eitel
SAN FRANCISCO (AA) - Republicans in the Senate released their version of tax reform legislation Thursday, a week after House Republicans unveiled a bill that would overhaul the U.S. tax code.
The Senate bill differs from the House bill in several significant ways, including the elimination of all deductions for state and local taxes, a move that would disproportionately affect 44 million Americans living in states with high taxes, including California, Connecticut, Illinois and New York.
Some Republicans in the House argued for partial repeals for some of those deductions, but the Senate bill does away with them completely.
The two bills will have to be reconciled and approved by both houses of Congress before it can be sent to the White House to be signed by President Donald Trump.
Trump, who is currently on an Asian tour, told Democrat senators they are “going to like it a whole lot more” than the House bill during a conference call Wednesday, according to media reports.
Compared to the House version, the Senate bill keeps the deduction for mortgage interest as well as the estate tax -- a tax on inheritances valued over $5.49 million.
The House bill would reduce the number of individual tax brackets from seven to four, a move widely criticized because it would mean the wealthiest Americans would pay lower tax rates. The Senate version retains the current seven brackets.
The Senate bill would also reduce the top corporate tax rate from 35 percent to 20 percent, similar to the House, but it delays implementation until 2019.
The House dictated the reduction happen next year.
After details of the delay until 2019 were released, the Dow fell just shy of 1 percent in afternoon trading. It later clawed back some of those losses but finished the day in the red – down about 100 points.
House Speaker Paul Ryan told reporters the House tax bill has the support of voters.
“This is not unpopular,” he said Thursday. “We’re actually letting people keep more money.”
But a day earlier, the nonpartisan Congressional Budget Office said the House bill would add $1.7 trillion to the national debt over the next 10 years.
The projection has not halted the Republican leadership in the House, who still want to pass the bill in the next few weeks. Trump, who has struggled to pass any major bill, has said he wants it done by Christmas.
We’re going to get this over the finish line,” Ryan added.
Democrats have begun to mobilize against the proposed tax overhaul and are taking aim at the elimination of the state and local tax deductions.
“Still reading the details, but based on what we’ve seen so far of the Senate GOP tax bill, it’s clear that this is another tax giveaway to the rich & big [corporations] & it’s coming squarely on the backs of those in the middle class,” Senate Minority Leader Chuck Schumer said on Twitter.