Repealing the alternative minimum tax is a priority for House Republicans in conference negotiations with Senate tax writers, Ways and Means Chairman Kevin Brady said.
The Texas Republican said he spoke to many House GOP members Tuesday morning who “feel strongly” about permanently repealing the AMT for corporations and individual taxpayers. The House-passed tax bill would do so, while the Senate measure would keep the current corporate AMT and expand exemptions for the individual AMT rather than repeal it.
“Both of them are very costly and they add complexity,” Brady told reporters Tuesday afternoon. He said the individual alternative minimum tax particularly affects families in high-tax states and the corporate AMT “undermines some of the pro-growth provisions that we kept in the tax code,” including the tax credit for research and development.
Brady said there were “strengths” in each chamber’s proposed structure for taxing pass-through business income.
“Right now we’re looking at how we can really improve on both structures, especially making sure pass-throughs that make a lot of capital investment in their business can achieve the lowest possible pass-through rate that we can deliver,” he said.
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On deductions for state and local taxes, Brady said possible changes are still on the table. Both the House and Senate tax plans would allow up to $10,000 in property taxes to be deducted, but that provision could be tweaked in conference to further address concerns of Republicans from high-tax states like New York, New Jersey and California.
“There’s four or five incentives, tax relief, that can help our high-tax states that we’re working with our lawmakers on,” he said. “Could a $10,000 deduction that could be used for income, sales and property taxes… how does that help address the SALT-state lawmakers’ concerns? All of those options and a few more are being discussed.”
Brady said making such a change could be costly in terms of revenue. “It’s got a pretty big figure to it. But all of this stuff interacts with each other,” he said.