Trump sets Christmas deadline for GOP tax reform bill
Unable to repeal Obamacare, the GOP has set its sights on producing the most extensive overhaul of the US tax system in three decades. An earlier outline of the plan showed a simplified tax filing process and a reduction in the number of tax brackets.
House Republicans struggled to complete work on a sweeping tax proposal, delaying its public release by a day as President Trump set an ambitious, by-Christmas timetable for passage of the legislation.
The GOP tax-writers strained to make last-minute changes to the proposed legislation, working Tuesday through the day and night to produce the first major overhaul of the US tax system in three decades. But they couldn't finalize details in time for their Wednesday deadline for a public rollout, and so moved it to Thursday.
The delay was announced Tuesday night by Rep. Kevin Brady (R) of Texas, chairman of the tax-writing Ways and Means Committee.
"We are making excellent progress. We are very close," Representative Brady told reporters. "A lot of work remains with the drafters, they are continuing to work through the night. We are moving forward."
The tax-writers have worked for weeks to reach compromises to ease objections by groups of rank-and-file Republican lawmakers, whose votes on final legislation are critical.
Trump has intensified his lobbying for the nearly $6 trillion tax overhaul plan, driven to score a major legislative achievement after the collapse of the Republicans' attempted repeal of the Obama-era health care law. Republicans see taxes as a political imperative that will determine whether they keep their majorities in the House and Senate in next year's midterm elections.
At the White House, an official said Mr. Trump looked forward to seeing legislation this week, adding that the administration was confident the delay wouldn't affect the ultimate timing of the bill. Brady said his committee plans to vote on the bill next week.
Although they had settled on some key details – such as a cut in the corporate tax rate to 20 percent and maintaining the top personal income tax rate for the wealthy of 39.6 percent – other elements still had to be resolved, including the income levels for each tax bracket.
The president set an aggressive timetable for the legislation and predicted a grand signing ceremony before Christmas at "the biggest tax event in the history of our country."
Late Tuesday after word came of the delay, Trump renewed his cheerleading on Twitter.
"The Republican House members are working hard (and late) toward the Massive Tax Cuts that they know you deserve. These will be biggest ever!"
The plan outline released last month by Trump and Republican leaders in Congress called for shrinking the number of tax brackets from seven to three or four, with respective tax rates of 12 percent, 25 percent, 35 percent and to be determined. The tax system would be simplified, and most people would be able to file their returns on a postcard-sized form.
The plan calls for nearly doubling the standard deduction used by most average Americans to $12,000 for individuals and $24,000 for families, and increasing the per-child tax credit. In addition to slashing the corporate tax rate, it also seeks to repeal inheritance taxes on multimillion-dollar estates, a big break for the wealthy.
The plan drew immediate criticism from Democrats, who complained it was too favorable to the wealthy and contradicted Trump's rhetoric of bringing relief and economic benefit to the stressed middle class.
Brady did not answer directly when he was asked – while leaving House Speaker Paul Ryan's suite earlier Tuesday – whether the drop in the corporate tax rate would happen immediately or be phased in. But, he said: "I want as much growth right from Day One as I can."
With the House Republicans deep in negotiations at the Capitol, Trump made his pitch.
"The process is complicated but the end result will not be that complicated," he said in the White House's Roosevelt Room, joined by more than a dozen leaders from the business and trade worlds. "It's going to be: People are going to pay less tax by a lot, companies are going to pay less tax by a lot – that's a big difference – and companies are going to start rebuilding and they're going to stay here."
Trump said he's directing Treasury Secretary Steven Mnuchin, White House economic adviser Gary Cohn and other administration officials to stay behind when he heads for Asia on Friday so they can help sell the tax proposal. The White House said Ivanka Trump, the president's daughter and adviser, had canceled plans to accompany the president to China and South Korea to help push the package.
The president said he was hopeful the House will approve the tax bill by Thanksgiving. But his overly optimistic timetable didn't address the concerns of lawmakers from states such as New York and New Jersey, who have opposed a proposal to eliminate the federal deduction for state and local taxes, arguing it would hurt their constituents and subject them to being taxed twice.
A battle has continued over contributions to 401(k) retirements accounts. The financial industry and some Republican lawmakers insist that the GOP plan not change the tax benefits of the popular savings vehicles, as has been floated by GOP leaders.
This story was reported by The Associated Press.