Senate approves ‘Tax Cuts and Jobs Act’; Menendez fails to restore state tax deduction

The path to tax reform moves on. On December 2, 2017, the Senate approved the “Tax Cuts and Jobs Act” (H.R. 1) by a 51-49 vote. Senator Bob Corker (R-TN) was the only Republican to vote against the bill.   The House and Senate must now agree to the same version of the bill through reconciliation which will begin today, Monday, December 4.

Of important note to residents of New Jersey and other high tax states, a motion to commit by Senator Robert Menendez (D-NJ) to restore the state and local tax deduction under certain conditions was defeated on a 48-52 vote.

Other important items

Before the vote, an amendment by Senator Ted Cruz (R-TX) to allow Section 529 accounts to be used for elementary and secondary education was approved 51-50, with Vice President Pence breaking the tie.

An amendment by Senator Bernie Sanders (I-VT) to create a Budget point of order for cuts to Social Security, Medicare and Medicaid fell to a Budget point order (Motion to waive failed 46-54).

Senator Sherrod Brown’s (D-OH) amendment on the Child Tax Credit fell to a Budget point of order (Motion to waive failed 48-52).

Senator Marco Rubio’s (R-FL) amendment on the Child Tax Credit also fell to a Budget point of order (Motion to waive failed 29-71).

Senator Tim Kaine’s (D-VA) amendment to provide for middle-class tax cuts offset by changing the corporate rate and restoring the AMT fell to a Budget point of order (Motion to waive failed 34-65).

A motion to commit by Senator Joe Manchin (D-WV) to make individual tax cuts permanent and to a 25% corporate rate was defeated 38-61.

Senator Maria Cantwell’s (D-WA) amendment to strike the energy title allowing oil and gas exploration in ANWR fell to a Budget point of order (Motion to waive failed 48-52).

Senator Jeff Merkley’s (D-OR) amendment to strike a provision exempting colleges that do not take federal funds from the tax on endowments was agreed to 52-48.

 

Caroprese & Company is following tax reform closely, and will continue to issue updates as progress is made. For questions, please reach out to your Caroprese tax professional or contact Brandon Caroprese directly at 201-591-1783 or bc@caroprese.co.

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