Looking At The House And Senate Tax Plans
SCOTT SIMON, HOST:
Republicans in the Senate have unveiled their vision for a long-promised tax overhaul. The House is ready to vote on its version next week. Once again, the two chambers seem at odds over a policy in which they agree and which they promised voters they would enact. President Trump has challenged the Congress to pass some kind of tax bill by Christmas, so there is the potential for a real holiday drama.
NPR congressional correspondent Kelsey Snell joins us. Kelsey, thanks so much for being with us.
KELSEY SNELL, BYLINE: Thanks so much for having me.
SIMON: Help us understand the goals of these two tax plans.
SNELL: Well, here's what the House and Senate have in common. Both bills are focused on driving the economy by cutting taxes and cutting taxes primarily for businesses. They want to grow the economy by making it easier for companies to make profits and, they say, hire more people. The House is really focused on satisfying the most conservative members. They want simple taxes. They want people to feel like they understand, you know, how they pay their tax bill.
The Senate does a little bit more to protect the tax breaks that people recognize and identify with. They specifically are protecting the mortgage interest deduction, student loan breaks and the breaks for charitable deductions and medical expenses - those things that when people say, I claim this on my tax bill, they can name them. And so it's a little bit more personal. In part, that's because the Senate - you know, senators represent the entire state, and they have constituencies that are broad and diverse, and so they want to make sure people feel protected.
SIMON: So help us understand some of the particulars in the House bill and then the Senate bill.
SNELL: Sure. So the House bill would take seven existing tax brackets and cut them down to three. They would slash the corporate tax rate from 35 percent to 20 percent. And they would double the standard deduction that most people take when they file their taxes. So if you're a married couple, you immediately would write off $24,000. If you're an individual, that's $12,000 you get to take off right off the top. The Senate does the same thing. But like we talked about already, they preserve a lot of the individual tax breaks that people use and take every day.
SIMON: So how do they reconcile the differences?
SNELL: Well, they're really not that far apart. For all we've been hearing about the differences between the House and Senate on this, the philosophies are the same. These are just issues around the edges. And taxes are really a sweet spot for Republicans. They want to get a deal.
We saw them run into conflicts during health care and with a number of other issues earlier this year, but taxes are something that Republicans get, something that is right in their wheelhouse and something they want to get done.
SIMON: Kelsey, how do Republicans, of all people, deal with the finding that both these tax bills would increase the federal deficit?
SNELL: Well, they already agreed, as most people probably have heard, to increase the deficit by $1.5 trillion in doing these bills, and they say that that's OK because they truly believe that cutting taxes will grow the economy. They say that these tax cuts, particularly for businesses, will help the economy grow. It will create jobs. And the deficits won't actually materialize.
SIMON: Recognizing this is a difficult estimate to make, do you think a tax bill of any kind is going to pass?
SNELL: I think that it is, like you said, very hard to estimate. Congress has been pretty unpredictable, and Republicans have fought over things where we thought they agreed. That being said, there is a huge political imperative here for them to deliver on a tax bill that - for a number of reasons. They believe voters want it. The president wants it. And taxes are a comfortable space for them - a place where they they feel comfortable talking to voters and standing by their decision to cut taxes, to increase the deficit. So in that regard, yes, I think that there is a good chance.
But we have to watch out for these people who are still deficit hawks - people like Senator Rand Paul and Senator Bob Corker - who say they don't want to add even one penny to the deficit through a tax bill. And they stand to create a real problem, particularly in the Senate, where they can only lose two votes and still have this pass.
SIMON: NPR's Kelsey Snell, thanks so much for being with us.
SNELL: Thanks so much for having me.
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