WASHINGTON — The House and Senate tax overhaul plans are broadly similar, but crucial differences are creating headaches for Republican leaders determined to keep myriad interest groups and factions of the GOP satisfied. And then there’s the timetable they’ve set of finishing the bill and getting it to Trump by Christmas.
The most politically challenging decisions involve dealing with popular and widely used tax deductions, structuring tax cuts for business and balancing personal income tax rates between middle-class families and the rich.
All of these decisions come against a generous — but firm — 10-year, $1.5 trillion cap on the measure’s cost to the federal deficit. Both House and Senate have adopted accounting gimmicks to squeeze tax cuts that appear larger down to fit that restraint.
Trump’s enormously expensive demand for a cut in the corporate tax rate to 20 percent is a big complication, as is unrest among House Republicans hailing from affluent suburban districts who are upset over the proposed loss of the deduction for state income taxes. A House compromise that provides a property tax deduction of up to $10,000 or else risks a revolt from GOP lawmakers from New York, New Jersey, and California.