The tax plan that passed Congress in the first half of 2018 has been in limbo for months.
The House of Representatives has passed a revised version of the plan with a few tweaks.
But the Senate has not yet voted on a final version.
The Senate bill would cut corporate taxes by $1.5 trillion and end the estate tax.
But it also would lower the standard deduction to $12,000 from $24,000.
It would give $300 billion in tax breaks to high-income earners and eliminate many of the deductions that middle-class Americans already enjoy.
And it would cut taxes on capital gains, dividends, and mortgage interest.
It’s a complicated plan.
But if it passes the Senate, it will likely be a major step toward addressing a major problem with the country’s tax code: high taxes for the wealthiest Americans.
It has become a point of controversy within the GOP that Republicans are trying to get rid of the estate and capital gains taxes as part of the tax bill.
In addition to the capital gains tax cuts, the House and Senate plans would also cut the corporate tax rate to 20 percent, reduce the top tax rate on individual income to 33 percent, and end deductions that benefit wealthy individuals.
But they would still eliminate some deductions that would benefit many middle- and working-class taxpayers.
“The real question for me is how do you make a real effort to address this problem?” says Roberton Williams, a senior fellow at the Tax Policy Center, a left-leaning think tank.
Williams says that the House plan is a “slippery slope.”
He says that even if the Senate does pass its own version, it would still likely be too far to the right for Republicans to get on board with.
“That’s why the House is going to be more vulnerable on the whole.
If they’re trying to move to the left, they’re going to have to do that on a much more radical level,” Williams says.
In the meantime, the tax overhaul has been a source of frustration for House Republicans.
“What we’ve heard over and over again from our members is that the Republicans have been so focused on this tax bill and it’s not the tax reform that they want, it’s the estate, it is not the capital, it has been,” said Rep. Kevin Brady (R-Texas), who sits on the Ways and Means Committee.
“So this is one of those areas where I think we’re not really seeing a strategy.”
The Senate plan, though, would make some changes to the tax code.
The plan would give the wealthy a tax break on their investment income, which they pay in lower tax rates.
And the Senate would lower income taxes for all taxpayers but some of those taxpayers would pay a bigger share of their income in taxes.
Under the Senate plan the top rate on capital income would drop from 39.6 percent to 37.8 percent.
The top rate for individuals would drop to 25 percent from 33 percent.
But for most families the top income tax rate would drop below 29 percent.
For couples, the top bracket would drop by 20 percent.
Under a House plan, the estate would be taxed at a lower rate of 39.7 percent.
And for joint filers, the rate would be 25 percent.
In an op-ed published in the New York Times this week, Brady and other Republicans said the House version of tax reform would increase taxes on families with incomes of $200,000 or more, while lowering taxes on the middle class.
The Republican plan would also make changes to individual tax rates, which have historically been much higher for high-earning households.
For example, Brady said the Senate bill, which would have given a tax credit of $5,000 to every filer with a household income of $250,000, would cut the credit by $2,400.
And he said the top marginal tax rate for people earning more than $1 million would drop, to 39.4 percent from the current 35 percent.
“This plan is not going to address the issue of how to pay for the tax cuts that are going to benefit the rich,” Brady wrote.
“We’ve got to do it through spending cuts, not by adding more money to the debt.”
Brady’s criticism is backed up by other lawmakers who have weighed in on the issue.
A number of Republicans have also called for changes to estate tax law.
One proposal is to cut the threshold at which estates must be taxed.
Under current law, estates must pass through the individual tax system in order to be taxed by the estate.
Brady also wants to end the deduction for state and local taxes and would end the deductions for property taxes.
But Brady says he’s not sure that would be enough to pay down the debt.
The bill also would repeal the Alternative Minimum Tax, which applies to many small businesses and has become increasingly unpopular with Democrats.
It was meant to be repealed under former President George W. Bush, but a Democratic-controlled