U.S. House tangles with top tax issues, bill's timetable in doubt

[October 31, 2017]  By David Morgan and Amanda Becker

WASHINGTON (Reuters) - As a self-imposed mid-week deadline for unveiling a tax-cut bill loomed, Republicans in the U.S. Congress were still grappling with key provisions and some lobbyists expressed concern that a bill might not be ready as expected on Wednesday.

Asked by reporters if Republicans would release a bill or a detailed summary, House of Representatives tax committee Chairman Kevin Brady said: "Our plan right now is the bill."

He added that the number of issues still unresolved was "very, very few," but the Texas Republican did not elaborate.

But other lawmakers and lobbyists said major elements were up in the air.

Questions remained on tax deductions for business interest payments and state and local taxes, as well as proposals to change tax law on retirement savings and small business taxes, they said.

Any significant delay in unveiling a bill could jeopardize the Republicans' goal of getting it through Congress and onto President Donald Trump's desk before January 2018.

In an effort to fulfill 2016 campaign promises and score their first significant legislative achievement since winning the White House and majorities in Congress, Trump and the Republicans have vowed to enact the first comprehensive tax reform since 1986.

But their plan for up to $6 trillion in tax cuts for businesses and individuals over a decade faces challenges, not only from Democrats, but from rank-and-file House Republicans.

One example is whether to keep the popular tax deduction for state and local tax (SALT) payments. Over the weekend, Brady said he would preserve the deductibility of property taxes under a potential deal with lawmakers from high-tax states such as New York and New Jersey who oppose ending the SALT deduction.

The U.S. flag flies in front of the Capitol Dome at the U.S. Capitol in Washington, U.S., September 12, 2017. REUTERS/Joshua Roberts

Analysts say eliminating the SALT deduction would disproportionately hit upper middle-class families in high-income tax states. Republicans from those states alone are numerous enough to derail tax legislation.

Republican Representative Tom Reed of New York said discussions were still "too fluid" on a possible compromise to preserve the deduction for property taxes, but end it for state and local income taxes. "Got to look at the numbers," Reed said.

A lobbying coalition for state and local governments, real estate interests and public unions said over the weekend that the Brady compromise would "unfairly penalize taxpayers in states that rely significantly on income taxes."

Over the weekend, the National Association of Home Builders vowed to defeat the tax bill, saying it would double the standard deduction to $24,000 for married couples and sharply reduce the number of middle-class homeowners claiming the mortgage interest deduction, raising home-ownership costs.

(Reporting by David Morgan and Amanda Becker; Editing by Kevin Drawbaugh and Mary Milliken)

[© 2017 Thomson Reuters. All rights reserved.]

Copyright 2017 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.