GOP releases its tax proposal

WASHINGTON — Republican lawmakers unveiled the most sweeping rewrite of the tax code in decades on Thursday, outlining a $ 1.51 trillion plan to cut taxes for corporations, reduce them for some middle- class families and tilt the United States closer, but not entirely, toward the kind of tax system long championed by businesses.

The House plan, released after weeks of internal debate, conflict and delay, is far from final and immediately ignited a legislative and lobbying fight as business groups, special interests and Democrats began tearing into the text ahead of a Republican sprint to get the legislation passed and to President Trump’s desk by Christmas.

“With this plan, we are making pro growth reforms, so that yes, America can compete with the rest of the world,” said House Speaker Paul Ryan of Wisconsin.

But Republicans from hightax states like New York and New Jersey said the bill will need to change to gain their support. Meanwhile, powerful trade groups representing the real estate industry and small businesses blasted the bill as ineffective and harmful to Americans.

“Contrary to their assertions, the Republicans are picking winners and losers,” said Jerry Howard, chief executive of the National Association of Home Builders. “They are picking rich Americans and corporations over small businesses and the middle class.”

Rep. Kevin Brady, R- Texas, chairman of the House Ways and Means Committee, said that the plan had the “full support” of Trump and predicted that it would be on his desk this year. Anticipating the resistance from industry groups, Brady said: “We’re going to prove them wrong once and for all.”

Rep. Peter Roskam, R- Ill., the top tax writer on the Ways and Means Committee, said he was braced for the lobbyist onslaught and would not be deterred.

“We’ve just finished the opening ceremonies of the lobbyist Olympics. My phone has all kinds messages and there are all kinds of criticisms,” he said. “The notion of just defending the status quo is insufferable and we’re not going to do it.”

The bill is estimated to cost $ 1.51 trillion over a decade. Lawmakers must keep the cost of the bill to $ 1.5 trillion if they want to pass it along party lines and avoid a filibuster by Democrats.

The plan establishes three tax brackets, 12 percent, 25 percent and 35 percent, and also keeps a top rate of 39.6 percent for the highest- earners, collapsing the total number of brackets from seven. The brackets fall along the following lines:

Those making up to $ 24,000 will pay no income tax. For married taxpayers filing jointly, those earning up to $ 90,000 will be in the 12 percent bracket; those earning up to $ 260,000 will in the 25 percent bracket and those earning up to $ 1 million would fall in the 35 percent bracket. Those making above $ 1 million will be in the 39.6 percent bracket, which is currently the top rate for millionaires. For unmarried individuals and those filing separately, the bracket thresholds would be half of these amounts, other than the 35 percent bracket, which would be $ 200,000 for unmarried individuals.

After much nail- biting debate, the House will not make any changes to the pretax treatment of 401( k) plans.