Much still to work out in tax reform bill

Tommy Binion of The Heritage Foundation joined Boston Herald Radio’s “Morning Meeting” program yesterday to discuss what’s expected of Republican senators now that the House of Representatives has passed its sweeping tax reform bill.

Q: During the health care votes, there were factions in Congress who didn’t trust the Senate to make certain decisions. Is there a parallel this time?

A: There is a parallel. In that situation, there were conservatives wanting the bill to move toward them, toward the right. And actually in this situation it’s more moderate or even liberal Republicans who oppose the Senate bill because it has a more conservative provision ... the state and local tax deductions, which is repealed by the Senate bill and only partially repealed by the House bill. So that’s the biggest difference that will move the most votes between the two bills. Those members of the House that are voting for this bill because it only partially repeals the state and local tax deductions — we’ll see if they’re able to support the Senate provision.

Q: If you’re prognosticating, what would you say will happen?

A: Neither bill allows for deducting income tax. The House bill allows for deducting property tax. Most of the high-tax states have high property tax as well, so I don’t think if tax reform happens that we’ll be deducting our state income tax. I think the House will likely allow for property tax deductions up to $10,000. I think that will win the day and I think that’s what we’ll be looking at next April when we file our 2018 taxes.

Q: Talk about some of these awesome things that are included here like the child tax credit and some other middle-class benefits. They’re going to expire whereas the corporate rate is somehow permanent. What’s the deal with that?

A: We’re using this wonky process — reconciliation — where, yes, the bill can pass with only 51 votes in the Senate but there are all kinds of rules about what portions of the bill have to balance out and when, and so there are things that expire. I would say it’s important that the corporate rate is permanent because businesses have to be able to project based on a law. They’re weighing when to do big capital expenditures and when to do future plans and so it’s important that that’s permanent. On the individual side ... when I see temporary and it’s on a tax cut, I remember the Bush tax cuts and I read it as a little bit more permanent than it may appear on the page.