Tax Reform: The Senate Bill Passes

Tax Cuts and Jobs Act (TCJA)

Last week, the Senate passed its own version of the Tax Cuts and Jobs Act (TCJA), its tax reform bill with the same name as the House’s version. The Senate significantly modified the bill approved by the Senate Finance Committee prior to Thanksgiving. This alert will focus on the key changes.

In part, these changes were the result of the need to raise revenue in order to meet Senate budget rules as well as responding to pushback by several “deficit hawks,” who are concerned with the bill adding $1.5 trillion to the deficit over the next 10 years. Even with amendments, the Joint Committee on Taxation estimates the TCJA will cost $1.45 trillion over a decade based on “static scoring,” which does not account for the bill’s estimated economic impact. Taking that into consideration, the “dynamic scoring” estimates the bill will cost $1 trillion over the next 10 years.

Read the alert from Baker Tilly in the US.