Republican tax proposal meets early resistance

Interest groups, conservatives, deficit hawks and Democrats weigh in

House Republicans rolled out a sweeping tax overhaul Thursday and were preparing to bring it up for a vote within weeks, even as some acknowledged their constituents could have to pay more and some conservative interest groups objected to the cost.

GOP leaders touted savings for the average family and said lower rates and new write-offs for businesses would spur job creation to make up for more than $1.5 trillion in lost tax revenue.

President Trump urged them to get him a bill to sign as soon as Thanksgiving. And many House conservatives, who balked earlier this year when a health care overhaul crafted in secret

was sprung on them as a finished product, were optimistic about quick action.

But Republicans from New York and New Jersey were angered their states would be hurt by the elimination of the deduction for state income taxes and a new cap on the property tax deduction.

And even before Democrats and liberal groups could complain about the distribution of the benefits, some groups on the conservative end of the spectrum were sounding alarms.

Freedom Partners Chamber of Commerce, a group connected with the conservative Koch brothers, initially put out a statement calling the bill “dead on arrival” because of a corporate tax provision that could raise costs for consumers. Later, Executive Vice President James Davis called the provision “fixable” and said “tax reform continues to be our top priority.”

The leader of another conservative group, the Club for Growth, said the plan’s inclusion of a 39.6% tax rate for married couples making more than $1 million — after an earlier framework said the top rate would be 35% — “punishes success and caves to Democrats’ class-war rhetoric.”

And deficit hawks at the Concord Coalition said the bill was fiscally irrespon- sible because it would add $1.5 trillion to a national debt that was already due to grow by $10 trillion.

“True tax reform should aim to grow the economy without growing the debt,” said Robert L. Bixby, Concord’s executive director.

The interest groups representing home builders and Realtors, whose political contributions favor the GOP over Democrats, planned an all-out assault on the bill because of the cap on the property tax deduction and a new limit that caps the deduction for mortgage interest on new loans at $500,000.

That criticism did not dent the enthusiasm of the plan’s supporters, however, especially since Republican activist groups have said tax cuts must be delivered ahead of next year’s midterm elections.

“We’re gonna get this done. You know why?” House Speaker Paul Ryan, RWis., told reporters. “Because the American people are counting on us.”

Ryan ran into trouble this year when he and his team crafted a health care overhaul and then urged members to pass it without the usual round of hearings. That trouble did not seem to be brewing this time, even though details were kept closely guarded until a briefing for members on Thursday morning.

“I think it’s really good, actually, and it’s surprising to me how consistent it is with what we were promised the framework was,” Rep. Andy Biggs, R-Ariz., said after the briefing.

Ways and Means Chairman Kevin Brady, R-Texas, said Main Street businesses would save and workers’ paychecks would rise from changes to business taxes, including lowering the top corporate rate from 35% to 20% and creating a new 25% rate for business owners to pay their taxes on their individual returns.

“The great news here is that average household in America, that’s struggling along at $59,000, making ... every dollar count, will receive a tax cut of over $1,100,” Brady said outside the White House after a meeting with Trump.

The Committee for a Responsible Federal Budget said that of the tax cuts in the plan, $1 trillion would go to businesses over the next 10 years, $200 billion would go to individuals, and $200 billion would go to estates as the current estate tax is phased out.

The White House is being intentionally vague about the specifics of the plan because the president wants to give negotiators space to make the changes they think are needed to win approval in the House, according to an ally close to the White House who was briefed Thursday on strategy but was not authorized to discuss it publicly.

Republicans control 52 seats in the Senate, so opposition from more than two Republicans could kill the bill if Democrats are all opposed.