As you may have heard, the prospects for a major year-end tax reform bill reaching the President’s desk improved significantly when the Senate passed its amended version of the Tax Cuts and Jobs Act late Friday night (December 1). The final vote, 51 to 49, followed a daylong cliffhanger involving who would vote “yes” and who, “no,” but ultimately the amendments Senators made throughout the day satisfied enough of them to pass the plan.
It is important to understand that the Bill is not yet a law. The House approved its version of the Tax Act several weeks ago and now the two versions head to committee conference where differences will be ironed out and a final bill created. We expect more changes to the bill as the differences are discussed as well as new political dynamics caused by those differences. Front and center will be the need to prevent ballooning deficits in the future if the final bill does not provide the advertised jobs creation and economic growth. Some other sticking points in the negotiations will likely include:
- The fate of the state and local income tax deduction
- Whether to include repeal of the individual mandate provisions of “Obamacare”
- Tax rate changes for businesses
- The timing of the changes
WBL is reviewing the Senate’s bill and following the developments of the Tax Cuts and Jobs Act as the reconciliation efforts progress. We will provide updates and analysis as new information emerges in the coming weeks. In the meantime, if you have specific questions based on what you have heard (some of which may have been reported or interpreted inaccurately), please let us know.