Reveal 76+ Striking Senate Tax Plan V House Plan Politico Top Choices Of Architects

Americans are undoubtedly struggling with the ever-changing tax codes being indicating proposed by both the House and the Senate. As it stands, the House passed a tax cut bill in November of 2017, and the Senate followed suit with their own version shortly after. It's a complex swirl of language and dots and loopholes but, at the end of the day, what is the real difference between the House and Senate bill?

The proposed bills clearly denote a desire to simplify the tax code. The Senate’s plan does reduce the federal income tax rate from the current seven brackets to a simpler four, while the House’s bill holds at seven. In addition, the Senate version delays the implementation of the corporate tax rate reduction, allowing the new, reduced rate to take effect in 2019, while the House bill lowers it to 20% beginning in 2018.

When it comes to minor deductions – like stimulatory methods for borrowing money, such as mortgage deductions and tax credits – the House plan keeps some detailed formulas, while the Senate plan eliminates some deductions all together and creates one big tax credit for all newly-adopted methods of borrowing.

As the debate over tax reform rages on, it’s important to understand the differences between the House and the Senate’s proposed plans. One of the most glaring points of distinction between the two is the one-time tax cut proposed by the House. This tax cut would exempt many from paying certain taxes and institute a constrainment of the estate tax. This could give the wealthy a substantial break that many others may not be able to receive.

On the other hand, the Senate’s plan does not include a one-time cut in taxes. Instead, senators proposed a series of temporary individual tax cuts, which could benefit users of “pass-through businesses” such as corporations, limited liability companies (LLCs), and S Corporations. This may be due to the fact that the Senate wanted to pass a tax plan that would adhere to the $1.5 trillion deficit cap currently in place.

When it comes to major differences between the House and Senate tax reform bills, the first most noticeable difference tends to be the number of brackets each bill proposes. Over the course of the past few decades, the tax system has become a labyrinth of deductions, credits, and rates, making it next to impossible to understand without the assistance of a professional. The Senate created four brackets in an effort to combat such confusion, while the House persisted with seven brackets.

The House proposed bill drastically cuts corporate tax rates, while the Senate’s tax bill cuts taxes for businesses and corporations, but only if they’re structured as pass-through entities. Pass-through businesses are those where owners pay taxes not on their corporate earnings, but instead their individual tax rates.

When comparing the House and Senate tax plans, the most noticeable difference is that the proposed House bill doubles the standard deduction for individuals and families. The Senate draft, on the other hand, only increases the standard deductions for individuals and families slightly.

In addition, the House's bill includes a full repeal of the individual mandate, while the Senate's bill includes a partial repeal. The individual mandate, created by the Affordable Care Act, is a provision that requires individuals to purchase health insurance or pay a monetary penalty.

The tax plans proposed by the House and Senate differ slightly when it comes to education and retirement savings. The bills both focus on supporting college-level savers and those trying to save for their retirement.

The Senate plan would allow tax-free distributions from a 529 savings plan to be used for tuition, as well as for books, computer equipment, fees and other education-related expenses; The House bill would expand this to allow for tax-free distributions from 529 plans to be used for elementary and secondary school tuition as well. The Senate bill would also make some minor modifications to the rules for multiple employer plans, allowing employers to join together to form a retirement plan.

When it comes to understanding how the House and Senate tax reform plans differ from one another, there are a few key elements that stand out. The House plan doubles the standard deduction for both individuals and families, while the Senate plan only slightly increases the standard deduction for individual and families.

The House bill also reduces the corporate tax rate from 35% to 20%, has provisions that limit the deductibility of corporate debt interest payments, and sunsets the corporate tax breaks at the end of 2025. The Senate bill, on the other hand, simply keeps the current corporate tax rate in place for the long term and does not include provisions related to corporate debt interest payments.

When taking a look at the differences between the House and Senate Tax Plans, the most glaring is the varying tax brackets proposed by each chamber. The House allows for seven brackets, while the Senate proposes a much simpler four-bracket system.

In addition, the House plan would implement the corporate tax rate reduction right away, lowering it to 20%, while the Senate version delays the implementation, allowing the new, reduced rate to take effect in 2019. As well, the House bill institutes a one-time tax cut –exempting many from certain taxes and instituting a constrainment of the estate tax– while the Senate’s bill institutes a one-time cut in taxes only to those users of “pass-through businesses” such as corporations, limited liability companies (LLCs), and S Corporations.

The proposed tax plans in the House and Senate both have their plusses and minuses. The House bill cuts the corporate tax rate from the current rate of 35% to a much lower rate of 20%, while the Senate plan keeps the corporate rate in place. The House plan also institutes a one-time tax cut, while the Senate plan only cuts taxes for those using “pass-through businesses”.

The House plan keeps certain deductions and credits, while the Senate eliminates some deductions all together and creates one big tax credit instead. In addition, the House allows seven tax brackets, while the Senate simplifies the system with four.

When it comes to comparing the final Senate and House Tax Plans, the most noticeable difference is still the number of tax brackets. Whereas the House allows for seven brackets, the Senate has proposed a much simpler four-bracket system. In addition, the Senate version delays the implementation of the corporate tax rate reduction, allowing the new, reduced rate to take effect in 2019, while the House bill lowers it to 20% beginning in 2018.

The Senate plan also simplifies minor deductions by eliminating some deductions all together and creating one big tax credit rather than individual formula-based deductions. Therefore, it could be said that the House plan allows more deductions while the Senate plan simplifies the tax code with a singular, across-the-board tax credit.

The debate as to which tax plan is better for the American taxpayer is ongoing, and a look at the 10 most notable differences between the House and Senate plans can help to illuminate the situation.

The House plan implements a one-time tax cut, while the Senate plan does not. In addition, the House plan doubles the standard deductions for individuals families. The House reduces the corporate tax rate to 20%, while the Senate does not. The Senate plan simplifies tax deductions by implementing a singular tax credit, while the House keeps more detailed formulas. The House plan institutes seven tax brackets, while the Senate institutes four, and the Senate delays implementation of the corporate tax rate reduction, allowing it to begin in 2019, while the House plan would lower it to 20% beginning in 2018.

When it comes to weighing the differences between the House and Senate Tax Bills, there are some key components that can help to make the decision easier. The House and Senate Tax Bills differ in several areas, such as the number of tax brackets, the corporate tax rate reduction, the amount of deductions allowed, the implementation of a one-time tax cut and the implementation of a unified tax credit.

The House plan institutes seven tax brackets, while the Senate plan simplifies the tax code with four brackets. The Senate plan delays implementation of the corporate rate reduction, allowing it to take effect in 2019, while the House bill lowers it immediately to 20%. In addition, the House plan institutes a one-time tax cut, while the Senate does not, and instead implements a unified tax credit for all newly-adopted methods of borrowing.