House Releases Tax Reform Legislation
Today, the House Committee on Ways and Means released its much anticipated tax reform package – “The Tax Cuts and Jobs Act”.
Highlights from the bill, include:
- The bill consolidates personal rates, maintaining the top tax bracket at 39.6 percent and lowers the corporate rate to 20 percent.
- The standard deduction is nearly doubled while the plan continues the deductions for charitable giving and mortgage interest for existing homes, but caps the benefit at $500,000 for new construction.
- The ability to deduct state and local income and sales tax (SALT) was partially repealed. Individuals will still have the ability to deduct up to $10,000 in property taxes, but state and local income and sales tax deductions were eliminated.
- The use of municipal private-activity bonds for financing professional sports stadiums will be phased out in 2018
The statement from MBFA Chair, Mayor Steve Benjamin, on the House tax bill, can be found here.
As attention turns to compromises, it remains a concern that municipal bonds could resurface as a potential offset. While the House bill allows for $1.5 trillion in deficit-funded tax cuts, fiscal hawks in the Senate appear ready to lower the figure significantly. Early reports out of the upper chamber show that every potential revenue source is on the table, municipal bonds included.
We thank House Leadership for recognizing the importance of municipal bonds and preserving the tax-exemption and we call on the Senate to follow suit. BDA and MBFA will continue to work with its partners on Capitol Hill to ensure that the tax status of municipal bonds is not altered.