By a vote of 227 to 203, the House today passed the final version of the long-awaited tax reform bill, which would bring about the first fundamental changes to the U.S. tax code in more than three decades. The bill — which marks a major advocacy win for the American Bankers Association — sets the tax rate for C corporations at 21 percent, effective in 2018, and provides a 20 percent deduction for Subchapter S banks and other pass-through entities. Other key provisions of the bill include:
- A top individual tax rate of 37 percent
- Elimination of the corporate alternative minimum tax
- Capping the mortgage interest deduction for new mortgages of $750,000 or more
- Retention of the low-income housing and new markets tax credits
- Deductibility of net interest expense limited to 30 percent of adjusted gross income for businesses with more than $25 million in annual gross receipts
- Elimination of net operating loss carrybacks with a limitation on carryforwards
ABA President and CEO Rob Nichols applauded the House vote. “We congratulate Speaker Paul Ryan, [Ways and Means Committee] Chairman Kevin Brady and members of the House for passing this historic tax reform bill that will grow the economy and create jobs,” Nichols said. The bill must now be passed by the Senate, which they are expected to do later this evening.