Senate Approves Tax Reform Legislation
Conferees Begin Negotiations
On Dec. 2, the Senate passed its version of tax reform legislation on a mostly party line vote of 51-49, with Senator Bob Corker (R-Tenn.) being the only Republican to oppose the bill. Prior to the vote, Senate Republicans unveiled a host of last minute changes to the legislation, which included an increase of the pass-through deduction from 17.4 percent to 23 percent. Combined with the Senate’s proposed individual rate schedule, this would lower the top marginal effective tax rate on pass-through businesses to 29.6 percent. This is a significant improvement compared to the original Senate proposal.
Unfortunately, however, there were some negative changes as well. The final Senate bill reinstated both the corporate and individual Alternative Minimum Tax (AMT), with the individual AMT income thresholds temporarily increased. AGC is very concerned about this development, and we will work with the Congressional tax writers to ensure that the AMT is fully repealed in tax reform.
On Dec. 4, the House of Representatives voted to go to conference with the Senate to resolve the differences between the two bills. Speaker Ryan appointed Reps. Kevin Brady (R-Texas), Devin Nunes (R-Calif.), Peter Roskam (R-Ill.), Diane Black (R-Tenn.), Kristi Noem (R-S.D.), Rob Bishop (R-Utah), Don Young (R-Alaska), Fred Upton (R-Mich.), and John Shimkus (R-Ill.) as the Republican conferees. Minority Leader Nancy Pelosi named Reps. Richard Neal (D-Mass.), Sander Levin (D-Mich.), Lloyd Doggett (D-Texas), Raul Grijalva (D-Ariz.), and Kathy Castor (D-Fla.) as the Democratic appointees.
On Dec. 6, the Senate also voted to go to conference. Majority Leader McConnell appointed Senators Orrin Hatch (R-Utah), Mike Enzi (R-Wyo.), Lisa Murkowski (R-Alaska), John Cornyn (R-Texas), John Thune (R-S.D.), Rob Portman (R-Ohio), Tim Scott (R-S.C.) and Pat Toomey (R-Pa.) as the Republican conferees. Minority Leader Schumer appointed Senators Ron Wyden (D-Ore.), Bernie Sanders (I-Vermont), Maria Cantwell (D-Wash.), Debbie Stabenow (D-Mich.), Robert Menendez (D-N.J.), Tom Carper (D-Del.), and Patty Murray (D-Wash.) as the Democratic conferees.
Conferees will meet over the coming weeks to negotiate the differences between the House and Senate bills, and eventually produce a conference report, which will then be voted on again by both the House and Senate. AGC sent a letter to conferees outlining our preferences between the House and Senate bills, along with other outstanding concerns. We will continue to aggressively push for the best possible bill for the construction industry during these negotiations.
For more information, contact Matthew Turkstra at firstname.lastname@example.org or (202) 547-4733.