Trump tax drive nears major milestone as
U.S. House readies bill
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[November 02, 2017]
By David Morgan and Amanda Becker
WASHINGTON (Reuters) - President Donald
Trump's drive to overhaul the U.S. tax system will reach a major
milestone on Thursday, when Republicans in the House of Representatives
unveil their long-awaited initial bill.
The expected bill will be the starting gun for a frantic race toward
what Trump and House and Senate Republicans hope will be their first
major legislative victory: the enactment this year of a tax package
seeking up to $6 trillion in tax cuts over the next decade for
corporations, small businesses and individuals.
Congress has not succeeded on comprehensive tax reform since 1986, when
Ronald Reagan was in the White House and Democrats controlled the House.
Trump said at the White House this week that he wants Congress to pass
tax bills by the U.S. Thanksgiving holiday on Nov. 23.
House Ways and Means Committee Chairman Kevin Brady has promised to
release a full bill on Thursday. But important issues remain unresolved
and Brady himself predicts the initial legislation will change next
week, when his panel is due to begin preparing it for an eventual House
As Brady's panel met late into the evening on Wednesday, going over the
final details of the tax package, questions remained about how to best
handle mortgage interest and 401(k) retirement plans, a federal
deduction for state and local taxes, and the tax plan's projected impact
on the federal deficit.
"We're going to make improvements at every step," Brady said as he left
A compromise that could remove one of the plan's biggest obstacles – the
proposed elimination of a deduction for state and local tax (SALT)
payments – is expected to be in the bill. The compromise would preserve
the deduction for property tax, but not income tax payments.
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President Donald Trump hosts a tax reform industry meeting at the
White House in Washington, U.S., October 31, 2017. REUTERS/Kevin
Lawmakers from high-tax states such as New Jersey, New York and
California, where upper middle-class voters would be hardest hit by
the SALT deduction, have expressed varying degrees of confidence
about the compromise.
Representative Tom MacArthur of New Jersey said that his staff is
calculating home prices in his district to determine where the
property-tax cap should fall. "I think it needs to go up," he told
Representative Lee Zeldin of New York, who favors keeping the full
SALT deduction, said on Wednesday there still needs to be "major
changes made to the proposals on state and local taxes."
The House bill will also cut the top corporate income tax rate to 20
percent from 35 percent, likely in several steps, Brady said.
It is also expected to phase out the estate tax paid by the
wealthiest tax payers; keep a top individual tax rate of 39.6
percent; set a repatriation rate for U.S. businesses with profits
overseas; and establish a new rate for "pass-through" businesses,
according to sources familiar with negotiations.
(This version of the story corrects to say Thursday, not Wednesday,
in first paragraph)
(Reporting by Amanda Becker and David Morgan; Editing by Sam Holmes,
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