New
House Gop Unleashes Sweeping Tax Legislation
House Republicans on Monday unveiled the heart of their long-awaited tax package, a 389-page bill that includes trillions in tax cuts – but also targeted tax hikes to offset some of the cost.
Colleges would see a special tax on their endowment-investment earnings rise, corporations would find it harder to deduct the pay of highly paid executives and green-energy subsidies championed by Democrats would be pared, under the plan.
Undocumented immigrants would have a harder time claiming tax breaks, private foundations and other nonprofits would face higher levies and professional sports franchises would see an important deduction crimped.
Those and other provisions are designed to help defray the budgetary cost of providing trillions in tax cuts that would translate into fatter refunds next year for millions of Americans.
The highly popular Child Tax Credit would grow, as would the standard deduction, and lawmakers would create new breaks demanded by President Donald Trump for overtime pay, car-loan interest and tips.
Lawmakers couldn't make good on Trump's promises to excuse Social Security from taxation, because of procedural rules in the Senate, so instead they would give seniors a bigger special deduction. It would also head off the expiration of a slate of temporary provisions set to lapse at the end of this year.
Lawmakers intend to formally take up the package Tuesday in the chamber’s tax-writing Ways and Means Committee. There could be additional changes there, and also before the plan hits the chamber floor.
There are still some blanks to fill in.
It’s uncertain, for example, how lawmakers will resolve a long-running dispute over raising a $10,000 cap on state and local tax deductions. The legislation would hike that to $30,000, and create a new $400,000 income limit, but it’s unclear whether that’s going to fly with blue-state Republicans zeroed in on the issue.
At the same time, lawmakers have been coordinating behind the scenes with Senate Republicans on the plan, who will have their own changes. Lawmakers hope to get a compromise plan to Trump by their July 4th recess.
A cost estimate of the plan was not immediately available.
The previously released chunk of the plan clocked in at nearly $5 trillion, far more than Republicans’ budget allows, though the net cost of the package would be brought down by the second installment of the plan.
It needs to fit within a budget requiring lawmakers to simultaneously cut spending. They’re now aiming for $4 trillion in total tax cuts, along with $1.5 trillion in spending reductions. They had hoped for as much as $4.5 trillion in tax cuts but gave up trying to find agreement on the $2 trillion in spending cuts that would have been required by their budget.
Ultimately, the tax provisions will be combined with energy, border and defense legislation into a megabill carrying Trump’s domestic priorities.
