What House tax plan could mean for Texas taxpayers,

It would take days — and more than a few attorneys — to figure out how the new House tax bill would affect specific individual or corporate taxpayers, but the plan i ncludes some obvious pluses and minuses for Texas taxpayers.

Of the proposals included in the bill, two might stand out for Texas residents. The first would cap the federal deduction of local property tax payments at $10,000. A second proposal would eliminate the state income tax deduction on federal returns, a provision that could make Texas a more attractive destination for people who live in states that level income taxes.

The bill, unveiled by House Republican leadership Thursday, almost certainly will change. Senate leaders already have said they intend to write their own version. But the broad strokes laid out in the House proposal provoked a lot of rapid analysis around the state.

“I’m still wrapping my head around most of i t myself,” said Jamie Katzen, a director and an estate and tax attorney at Coats Rose’s office in Dallas.

The bill reflects the GOP’s interest in reducing federal tax rates, particularly for corporations, Katzen said, a philosophy that meshes well with the general corporate and political sensibilities in Texas.

“We have a very strong corporate culture, so to lower the corporate income tax rates significantly could be a huge boon to business in Texas,” he said.

For individual taxpayers, the bill’s provision to reduce and ultimately eliminate the estate tax might also play well in the state, he said.

But it also includes a variety of trade-offs. Provisions that might cost Texans more on the federal returns might be offset by other factors, including the bill’s proposal to double the standard deduction to $24,000.

“It could be that most Texans wouldn’t be itemizing at all,” Katzen said, so they wouldn’t be worried about changes to the mortgage interest deduction or the lower limit on the property taxes one could deduct.

Still, if those proposals remain, many Texans could take a hit or enjoy a gain. For example, the state’s reliance on property taxes could cost wealthier homeowners more on their federal returns. The bill would cap property tax deductions at $10,000.

Locally, about 45,000 properties with homestead exemptions — or 21 percent of about 214,000 properties with homestead exemptions — have tax bills above $10,000 for 2017, according to data from the Travis Central Appraisal District. But those 45,000 properties pay about 46 percent of taxes charged to properties with homestead exemptions.

Meanwhile, the elimination of the federal deduction for state income taxes could benefit states such as Texas that don’t have income taxes because it could make them even more attractive to people and businesses from a tax standpoint. But some economists don’t think the impact would be significant.

Bernard W einstein, an economist and Southern Methodist University professor, said few individuals or corporations relocate solely to avoid state income taxes. Still, Texas and other states that don’t have state income taxes will use elimination of the federal deduction as a selling point when trying to attract new development, he said.

“We love to brag about the fact that we don’t have an income tax, so it’s great PR for the state,” Weinstein said.

Other provisions include a proposal that would make mandatory a tax on corporate profits that multinational companies hold overseas. The bill proposes a 12 percent tax on earnings held in cash and a 5 percent levy on profits reinvested in other, more permanent assets, such as buildings and equipment.

Dell Technologies, for example, retains billions of dollars of profits it generates from overseas sales in various foreign jurisdictions. For its most recent fiscal year, which ended Feb. 3, the company said keeping or investing foreign profits in those jurisdictions knocked 4.9 percentage points off the statutory 35 percent corporate tax rate in the U.S. However, the House bill would offer something of an out, proposing a tax holiday for companies that repatriate earnings to the U.S.

A spokesman for Dell Technologies couldn’t be immediately reached for comment.