Senate GOP tax bill would delay biz cut, undo deductions
- Author: Jon Douglas Nov 10, 2017,
Nov 10, 2017, 0:21
Amid intense political pressure to achieve results, Senate Republicans prepared to unveil sweeping tax legislation Thursday that would usher in billions in cuts for people and corporations and repeal the federal deduction for state and local taxes.
Senate Republicans unveiled their tax overhaul plan Thursday as the GOP races to pass President Donald Trump's top priority before their self-imposed Thanksgiving deadline. Delaying that reduction would lower the cost of the bill to the Treasury, but the delay is opposed by the White House and some Senate Republicans. Some of the bill's provisions threaten GOP rebellion. Their bill would leave the prized mortgage interest deduction untouched for homeowners in a concession to the powerful real estate lobby but would ignore a House compromise on the hot-button issue of state and local tax deductions.
The Senate plan differs in some key ways from the version introduced by the House last week. And it would preserve the medical expenses deduction, which the House looked to scrap.
It would lower the corporate tax rate to 20 percent, which the talking points say are the largest reduction for the US corporate tax rate in history.
Early reports of the delay in making public the Senate tax plan sent the Dow Jones Industrial average down more than 200 points, though business interests had anxious the phase-in would last even longer and the market recovered.
In the House, Ways and Means Committee Chair Rep. Kevin Brady was making last-minute changes before the panel votes later Thursday to deliver it to the full House.
Despite having property taxes that could potentially be deducted under the House bill, many of these taxpayers would not deduct those taxes in practice because the combination of itemized deductions they are allowed to deduct (which would no longer include state income and sales taxes) would be smaller than the standard deduction. Several GOP lawmakers in the House have already come out against their colleagues' plan.
The Senate would boost the child tax credit to $1,650 and raise the income threshold for the measure. It would also lower the tax rate on "hard-earned business income of Main street job creators" to no more than 25 percent, the talking points say. If Republicans don't meet that, the measure would be vulnerable to a bill-killing Senate filibuster by Democrats that GOP senators lack the votes to block.
The tax reform plan crafted by House Republicans would add $1.7 trillion to the debt over the next decade, according to a brief analysis released Wednesday by the nonpartisan Congressional Budget Office (CBO).
That could force them to scramble for more revenue as the process moves along.