GOP tax overhaul biggest in decades

» With fanfare and WASHINGTON a White House kickoff, House Republicans unfurled a broad taxoverhaul 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 homebuyers 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 spark plug 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 phase- out 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 thewealthiest 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 theHouse 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.

TheHouseRepublicans’ plan, which took them months to craft in countless closed- door meetings, represents the first step in their effort to reverse what’s been apolitically disastrous year in Congress.

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.

Republicans must keep their plan’s shortfall from spilling over that $ 1.5 trillion line or the measure will lose its protection against Democratic Senate filibusters, bill- killing delays that take 60 votes to overcome. There are just 52 GOP senators, and unanimous Democratic opposition is likely.

The bill would telescope today’s seven personal income tax brackets into just four: 12 percent, 25 percent, 35 percent and 39.6 percent.

Many middle- income families would pay less, thanks to the bigger standard deduction and an increased child tax credit. Republicans said their plan would save $ 1,182 in taxes for a family of four earning $ 59,000, but features like phase- outs of some benefits suggest their taxes could grow in the future.

One trade- off for the plan’s reductions was its elimination of breaks that millions have long treasured. Gone would be deductions for people’s medical expenses and their ability to write off state and local income taxes. The mortgage interest deductionwould be limited to the first $ 500,000 of the loan, down from the current $ 1 million ceiling.