Tax bill would cut rates – and breaks
WASHINGTON — With fanfare and a White House kickoff, House Republicans unfurled a broad tax-overhaul plan Thursday that would touch virtually all Americans and the economy’s every corner, mingling sharply lower rates for corporations and reduced personal taxes for many with fewer deductions for home- buyers and families with steep medical bills.
The measure, which would be the most extensive rewrite of the nation’s tax code in three decades, is the product of a party that faces increasing pressure to produce a marquee legislative victory of some sort before next year’s elections. GOP leaders touted the plan as a sparkplug for the economy and a boon to the middle class and christened it the Tax Cuts and Jobs Act.
“We are working to give the American people a giant tax cut for Christmas,” President Donald Trump said in the Oval Office. The measure, he said, “will also be tax reform, and it will create jobs.”
It would also increase the national debt, a problem for some Republicans. And Democrats attacked the proposal as the GOP’s latest bonanza for the rich, with a phaseout of the inheritance tax and repeal of the alternative minimum tax on the highest earners — certain to help Trump and members of his family and Cabinet, among others.
“If you’re the wealthiest 1 percent, Republicans will give you the sun, the moon and the stars, all of that at the expense of the great middle class,” said House Minority Leader Nancy Pelosi, D-Calif.
And there was enough discontent among Republicans and business groups to leave the legislation’s fate uncertain in a journey through Congress that leaders hope will deposit a landmark bill on Trump’s desk by year’s end.
Underscoring problems ahead, some Republicans from high-tax Northeastern states expressed opposition to the measure’s elimination of the deduction for state and local income taxes. Senate Finance Committee Chairman Orrin Hatch of Utah called the House measure “a great starting point” but said it would be “somewhat miraculous” if its corporate tax rate reduction to 20 percent — a major Trump goal — survived. His panel plans to produce its own tax package in the coming days.
The House Republicans’ plan, which took them months to craft in countless closed- door meetings, represents the first step in their effort to reverse what’s been a politically disastrous year in Congress. Their drive to obliterate President Barack Obama’s health care law crashed, and GOP lawmakers concede that if the tax measure collapses, their congressional majorities are at risk in next November’s elections.
The package’s tax reductions would outweigh its loophole closers by a massive $1.5 trillion over the coming decade. Many Republicans were willing to add that to the nation’s soaring debt as a price for claiming a resounding tax victory. But it was likely to pose a problem for others — one of several brushfires leaders will need to extinguish to get the measure through Congress.