Last week, the House Committee on Ways and Means approved H.R. 1, the “Tax Cuts and Jobs Act” which proposes a variety of changes to the U.S. tax code. The vote was 24-16, along party lines with Republicans supporting the measure and Democrats opposing it. In addition, Senate leaders released details of their own proposal to reform the tax code.
As approved out of committee, H.R. 1 proposes changes to the individual and corporate tax rate structure, eliminates a host of individual deductions and exemptions and calls for a repeal of the estate tax after seven years. House leaders plan to consider and complete consideration of H.R. 1 by the end of this week.
Senate Republicans also released details on their own proposal to overhaul the tax code late last week. Like the House bill, their proposal would make changes to the individual and corporate tax rates and eliminate a number of exemptions and deductions. However, unlike the House bill which would gradually repeal the estate tax, the Senate proposal would simply double the estate and gift tax exemption thresholds. There are also notable differences between the House and Senate proposals with regard to the federal tax treatment of state and local taxes, home purchases, medical expenses, charitable contributions, and student loan payments to name a few. The Senate Finance Committee, which has jurisdiction over tax matters in the Senate, is expected to begin marking up or considering the Senate proposal today with the goal of passing their bill by the end of the month. Both measures are expected to be further altered as they advance forward.
As noted previously, while NTEU does not have a position on general tax policy per se, we are concerned with the amount of debt the House and Senate tax proposals would produce, if enacted, that would almost immediately require huge cuts to mandatory spending threatening federal employee benefit programs, Medicare, Social Security, and other core federal programs the American people rely on.
As the House and Senate proceed with the consideration of their tax reform proposals this week, NTEU will continue to monitor the bills and their impact on federal employees, and will keep you apprised of any important developments.
Should you have any questions, or require additional information, please contact your chapter president.