Congress REACHES DEAL on tax cuts

WASHINGTON — Congressional Republicans forged an agreement Wednesday on a major reform of the nation’s tax laws that would provide generous tax cuts for most Americans.

“The cynical voices that opposed tax cuts grow smaller and weaker, and the American people grow stronger,” Trump said at the White House. “This is for people of middle income, this is for companies that are going to create jobs. This is for very, very special people, the great people of America.”

The business tax cuts would be permanent, but reductions for individuals

would expire after a decade — saving money to comply with Senate budget rules. In all, the bill would cut taxes by about $1.5 trillion over the next 10 years, adding billions to the nation’s mounting debt.

The legislation, which is still being finalized, would cut the top tax rate from 39.6 percent to 37 percent, cut the corporate income tax rate from 35 percent to 21 percent and allow homeowners to deduct interest only on the first $750,000 of a new mortgage.

The top tax rate currently applies to income above $470,000 for married couples, though lawmakers are reworking the tax brackets.

The standard deduction would be nearly doubled, to $24,000 for married couples.

Details of the agreement were described by Republican senators and congressional aides.

“It’s not my vision of the perfect, but again, this is definitely going to be a strong pro-growth tax package,” said Sen. Ron Johnson, R-Wis.

Republicans said they expect the package to increase economic growth, generating additional tax revenue and lessening the hit to the budget deficit.

Federal Reserve Chair Janet Yellen said she and her colleagues expect a lift to economic growth from the tax package.

Yellen said at a news conference the likelihood of lower taxes is why Fed officials expect the economy to grow in 2018.

The tax bill would scale back the deduction for state and local taxes, allowing families to deduct only up to a total of $10,000 in property and income taxes. The deduction is especially important to residents of high-tax states like New York, New Jersey and California.

Business owners who report business income on their personal tax returns would be able to deduct 20 percent of that income.

The bill would also repeal the controversial mandate that most Americans buy health insurance, a central provision of Obamacare.

Senate leaders plan to vote on the package Tuesday. If it passes, the House would vote next. GOP leaders hope to send the bill to Trump before Christmas.

“Let’s not waver now — let’s not give in to the Washington status quo — not when tax reform is so close,” said Rep. Kevin Brady, R-Texas, chairman of the tax-writing House Ways and Means Committee.

The measure has come under attack by Democrats who don’t favor cutting taxes.

Schumer predicted that the bill would drag down Republicans in next year’s congressional elections. “I believe they’ll pay a very steep price for this bill in 2018,” he said.

The agreement was reached hours before a joint House-Senate conference committee met in public for the first time. The committee is charged with blending the tax bills passed by the House and Senate, though Republicans have done all of their negotiations behind closed doors.

The full details will be unveiled by the end of the week, Brady said.

Once the plan is signed into law, workers would start seeing changes in the amount of taxes withheld from their paychecks early next year, lawmakers said — though taxpayers won’t file their 2018 returns until the following year.

Corporate tax cuts would take effect in January, allowing businesses to immediately write off the full cost of capital investments.

The measure would fulfill a longstanding goal for top Republicans such as House Speaker Paul Ryan of Wisconsin to rewrite the loophole-cluttered tax code.

As Trump met with lawmakers at the White House Wednesday, he said they were getting “very, very close to a historic legislative victory.”