The Senate version of the Republicans’ tax plan, the Tax Cuts and Jobs Act, moved one step closer to becoming a reality on Tuesday when the Senate Budget Committee approved the bill.
Of interest to those who operate in the housing industry, the Senate version of the tax reform bill will keep the current mortgage interest deduction cap at $1 million, but has drawn fire from the housing industry for doubling the standard deduction, which some housing experts say could make the mortgage interest deduction less attractive.
This is different from the version of the bill that recently passed in the House of Representatives. The House version would would slash the MID in half to just $500,000. The House passed its tax reform bill a couple weeks ago, moving it to the Senate.
The Senate version of the bill passed out of the Senate Finance Committee before the Thanksgiving holiday, but as Politico notes, the Budget Committee was required to pass the bill to allow the bill to be approved by a simple majority.
The Senate budget panel was required to green-light the tax bill because Republicans are using a budget maneuver that would allow them to pass the bill with only 51 votes. Under those procedural rules, the committee could not substantially change the legislation before it heads for a full floor vote.
The White House celebrated the Budget Committee’s vote.
“President Donald J. Trump applauds the Senate Budget Committee on taking an important step toward passing historic tax relief and reform and clearing the Tax Cuts and Jobs Act this afternoon,” White House Press Secretary Sarah Huckabee Sanders said Tuesday in a statement.
“The momentum driving our shared priorities of job growth, economic competiveness, and fiscal responsibility through tax reform is undeniable, and this Administration is encouraged by the progress the Senate has made toward achieving these priorities,” Sanders continued. “The President looks forward to providing tax cuts for hardworking Americans by the end of the year.”
Now, the bill likely moves to a full Senate vote.
As analysts from Keefe, Bruyette & Woods noted earlier this week, the likelihood of the bill passing in the Senate is significant.
“We think the recent negative tone in the press about the difficulty in passing a tax bill has been overdone,” KBW equity researchers Brian Gardner and Michael Michaud wrote. “We acknowledge that there are some political hurdles but we do not see any of them as unresolvable and we continue to handicap the prospects for passing some form of tax legislation at around 70-75%.”