The generally agreed-upon deadline for final action on the GOP’s tax bill is Christmas. But pressured by the twin contingencies of bad political news from Alabama that they’d love to push out of the spotlight, and planned presidential remarks on tax policy this afternoon, congressional Republicans have signaled they have reached an agreement — even though all the details haven’t been worked out yet. The high sign also precedes a meeting of the House-Senate conference committee that is technically supposed to be handling the negotiations, but may instead simply ratify the deal worked out at higher levels.
According to Politico, several issues that have been hanging fire are now more or less resolved:
One major deal that fell into place, on the state and local tax deduction, would allow taxpayers to choose a property tax deduction or a deduction for state and local income taxes, up to $10,000 in either case, according to a GOP congressional aide and a person familiar with the process….
Lawmakers had made progress Tuesday toward an agreement that would set the corporate tax rate at 21 percent and the top individual rate at 37 percent, but those details remained in flux. There was also a deal to allow homeowners to deduct the interest on up to $750,000 in mortgage debt, down from $1 million now.
The deal to lower the individual top rate is arguably the politically riskiest step negotiators are taking, particularly after the GOP rejected a parallel proposal by Republican senators Marco Rubio and Mike Lee to make the same adjustment in the corporate rate to provide revenues for a beefed-up child tax credit. Rubio warned this was a bad idea just yesterday:
It doesn’t sound like the agreement is fully wrapped, however:
Another major issue awaiting resolution was how to treat so-called pass-through businesses that pay taxes through the individual side of the tax code.
And you’d have to guess that making sure the whole package hangs together from a fiscal point of view is another little detail that’s left to be worked out.
But hey, Republicans need a positive distraction today, and possibly a decisive step to allay fears that they’ll still be wrangling over taxes when newly minted Democratic senator Doug Jones arrives in Washington. So we’ll probably hear a lot of self-congratulation from congressional leaders and the president very soon.