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Conference committees generally are free to conduct their negotiations as they choose, but they are to address only the matters on which the House and Senate have disagreed. Moreover, they are to propose settlements that represent compromises between the positions of the two houses. When they have completed their work, they submit a conference report and joint explanatory statement, and the House and Senate vote on accepting the report without amendments. Sometimes conference reports are accompanied by amendments that remain in disagreement. Only after the two houses have reached complete agreement on all provisions of a bill can it be sent to the President for his approval or veto.

Several proposals for major reform of the Federal income tax system, including replacement of the current tax with a new type of tax, have been introduced or considered in the 104th Congress. Among the most widely discussed are the flat tax, a value-added tax, a national sales tax, a proposal for a direct consumption tax (called the USA tax), and income tax reform. Most of these new taxes convert the tax base from an income to a consumption base, most eliminate deductions for mortgage interest and property taxes, and most flatten the rate structure--in some cases by adopting a single tax rate. While these tax revisions touch on all aspects of the economy, this paper focuses on the effects on housing.