Senate Republicans have imposed their will on the tax bill — scaling back pay-fors, making more tax cuts permanent and crushing SALT.
But the tax fight isn’t over. Senate Republicans are in for tough negotiations to get a compromise on politically fraught Medicaid cuts and tax changes that have to be settled with uneasy senators and wary House members.
Republicans are rushing to get the party-line reconciliation bill carrying President Donald Trump’s domestic agenda through the Senate by July 4. Then they want to get it to Trump’s desk before August.
Plenty could change before any bill makes it through Congress. But we want to highlight the notable winners and losers from the Senate’s rewrite of the House tax bill.
Winners.
— Big businesses: Senate Republicans put their foot down and made a trio of tax breaks permanent, rather than reviving them for five years like the House bill did. That includes a provision affecting businesses’ research and development spending, which is a huge priority for large companies.
There are still tax increases that K Street isn’t thrilled about, but things have shaken out well overall for corporate America.
— Seniors: GOP senators scaled back Trump’s tax priorities in their bill by adding new limits to provisions like “no tax on tips” and “no tax on overtime.” But Senate Republicans decided to spend more on tax cuts for seniors. Their bill gives seniors who earn less than $75,000 an extra $6,000 tax deduction. The House offered $4,000.
— Sports team owners: Trump had a fun surprise for owners of major league sports teams earlier this year when he called for a crackdown on their taxes. The House delivered, limiting a key tax break for team owners that would’ve seen them pay $991 million more in taxes over a decade. The Senate dropped the tax hike in a win for the big leagues.
Losers.
— SALT: Senate Republicans despise deductions for state and local taxes and made that very clear. They responded to the House lifting the SALT cap to $40,000 in its bill by extending the current $10,000 limit in the Senate version.
GOP senators only represent purple and red states where the SALT cap doesn’t matter the way it does in blue states. But House members from states like New York, New Jersey and California view a bigger deduction as an existential issue and are promising to vote down any bill that doesn’t include one.
— Pass-through businesses: There’s a lot for partnerships, S corporations and other pass-through businesses to cheer in the tax bill. For one, they wanted their 20% deduction to be made permanent, and it will be. But the House shelled out to boost deductions for these firms to 23%. Senate Republicans reverted to 20% as they tried to make the deficit math work.
— HSAs: The House tax bill would’ve expanded tax-advantaged health savings accounts. The Senate dropped the new HSA boosts. There was a lot of ground for Senate Republicans to try to cover, juggling different priorities and costs in the tax bill. We’re sure the efforts from HSA backers won’t end here.
