Lawmakers Reach Agreement on Key Tax Issues

Republican lawmakers negotiating the differences between the House and Senate tax reform bills have reportedly reached a tentative agreement on a package that would pin the C corporation tax rate at 21 percent, eliminate the corporate alternative minimum tax and provide a 20 percent deduction for pass-through businesses, with the new rates effective in 2018.

The bill also would lower the top individual tax rate to 37 percent and allow individuals to deduct up to $10,000 in either property taxes or state and local income taxes, according to reports. Issues that ABA has been advocating on but whose resolution is still unclear include provisions related to base erosion, income recognition for mortgage servicing rights and the elimination of net operating loss carrybacks.

Lawmakers are not expected to release the details of the package until later this week, but lead negotiators expressed confidence that it would be ready for votes in both the House and Senate early next week and could head to the president’s desk before Christmas.