House panel OKS new GOP tax plan; passage chances cloudy

WASHINGTON — House lawmakers on Thursday debated a Republican plan to expand the new tax law by making permanent the individual tax cuts set to expire in 2026.

The tax-writing House Ways and Means Committee took up the legislation, with the Republican majority prevailing to approve it in a 21-15 party-line vote. Prospects for the measure, which Democrats unanimously oppose, are dim in the Senate, and it might not come to a vote by the full House before the November elections.

House Republican leaders are portraying the second crack at tax cuts as championing the middle class and small businesses.

“We must keep building off the momentum from last year’s tax reform to ensure our economy keeps booming,” Republican Rep. Kevin Brady of Texas, who leads the committee, said at the start of the session.

But as the midterm elections loom in two months, polls are showing lukewarm support among voters for the $1.5 trillion package of individual and corporate tax cuts that President Donald Trump signed into law in December as his signature legislative achievement.

And about a dozen Republican House members, facing re-election fights in the high-tax, Democratic-leaning states of New York, New Jersey and California, voted against their party’s tax legislation last year. They’re likely to oppose the new version, which would make the $10,000 cap on state and local deductions permanent. The GOP lawmakers are pushing to hold onto their seats in suburban districts where Trump is unpopular.

The new Republican plan also calls for new tax incentives for savings by creating a “universal savings account” for families that could be used for a range of purposes and would allow the tax-free earnings to be more easily withdrawn than is the case with existing retirement accounts.

Also, the Republican plan would allow the popular, tax-free 529 college savings accounts to be used to pay for apprenticeship fees and home schooling expenses and to pay off student debt. And workers would be able to tap their retirement savings accounts without tax penalty to cover expenses from the birth of a child or an adoption.

Startup businesses would be permitted to write off more of their initial costs.