GOP tax update - Nomura

Analysts at Nomura gave a Tax update following the scheduled GOP leaders conference at 11:30 (EST) on Thursday morning.

Key Quotes:

"Tomorrow, the House Ways & Means Committee is likely to vote the House tax reform bill out of committee, setting up a full floor vote for next week. In the Senate, Senator Hatch (R-UT), who chairs the Senate Finance Committee, indicated that the Senate will release its tax reform bill tomorrow. 

We expect the Senate bill to differ from the House bill in a number of ways. 

The Senate is likely to fully repeal the state & local tax deduction (SALT), a harder line relative to the House bill that kept a maximum $10k state & local property tax deduction. In addition, implementation of the corporate rate reduction could be delayed by one year. 

Most important, the Senate bill will need to be deficit-neutral beyond the first 10 years (to pass the “Byrd rule”). Thus, tomorrow we will be waiting to see how the Senate deals with the longer-run fiscal implications of its bill in particular. As with the health care debate, the binding constraint for the tax reform process could lie in the Senate."