Now that both the Senate and the House have passed some sort of tax reform, they need to reconcile the differences between the two bills and take another vote once they come to an agreement. Here are the major differences:

The Healthcare Mandate

The Senate version eliminates the ACA’s individual mandate, meaning people don’t have to buy health insurance.

The House version keeps the mandate.

It’s estimated that the number of people without insurance would rise around 15% without the mandate.

Permanent and Temporary Cuts

The Senate version makes corporate tax cuts permanent, but lets the individual tax cuts expire.

The House version makes all tax cuts permanent for both corporations and individuals.

The difference here has to do with the Senate’s rules on passing financial bills.

Estate Tax

The Senate version doubles the unified tax credit for estates, but doesn’t repeal the estate tax.

The House doubles the unified tax credit over several years and then repeals it entirely.

Note that only .2% (that’s 1 in 1,000 estates) ever pay any estate taxes. Also note that with the step up in basis, repealing the estate tax means heirs don’t pay any taxes, even on capital gains.

Child Tax Credit

The Senate version increases the child tax credit to $2,000 per child, but certain low-income households wouldn’t qualify.

The House version increases the child tax credit to $1,600, but again certain low-income households wouldn’t qualify.

Both versions prevent undocumented parents from receiving the credit even if the child is a U.S. citizen. Marco Rubio and Mike Lee, both Republicans, tried to expand the credit to low-income households that pay payroll taxes, but it was defeated.

Mortgage Interest Deduction

The Senate version leaves the mortgage deduction as is.

The House version caps the amount of a loan for which interest can be deducted at $500,000.

Tax Brackets

The Senate version keeps the current number of brackets (7), but lowers the top rate to 38.5%.

The House version reduces the number of brackets from 7 to 4, and it looks like those who make the most in the new tax brackets will see a slight decrease in taxes and those at the bottom of each bracket will see a slight increase.

Corporate Tax Rate

The Senate version reduces the corporate tax rate to 20% starting in 2019.

The House version reduces the corporate tax rate to 20% starting in 2018.

But what about simplifying the corporate tax loopholes? I kind of thought that’s what this whole effort was all about.