Rich tax cut...

House GOP releases sweeping plan to cut taxes

The tax overhaul is Republicans’ top priority ahead of next year’s elections, and lawmakers are desperate for a victory after the Obamacare repeal failed.

By BRIAN FALER

UPDATE 10 a.m.:

House Republicans released a tax-reform bill Thursday that would cut the corporate tax rate to 20 percent from 35 percent. The plan also includes cuts to individual tax rates and increases the standard deduction for individuals and families, according to talking points released by Republicans. Retirement plans including 401(k)s appear to be untouched and the top tax rate for wealthy Americans would remain the same.

Tax writers began briefing their colleagues on the details Thursday morning.

ORIGINAL STORY:

House Republican leaders have begun briefing colleagues on their long-anticipated plan to overhaul the tax code, kicking off what is likely to be a grueling slog to get legislation to President Donald Trump by the end of the year.

The proposal due to be released Thursday is expected to call for the biggest rewrite of the code in a generation. It will call for cuts in tax rates on businesses and most individuals in exchange for killing scores of narrowly drawn tax breaks.

Exactly who would lose in the proposal, and possibly have to pay higher taxes, has been a closely held secret, and many lawmakers will surely be surprised at the scope of changes required to make the numbers behind the plan work.

The National Association of Realtors has already begun lobbying against the proposal, with online ads targeting Ways and Means members warning of changes to the popular mortgage interest deduction and a writeoff for state and local taxes.

“Don’t let tax reform become a tax increase for middle-class homeowners,” the ad says.

The tax overhaul is Republicans’ top priority ahead of next year’s elections, and lawmakers are desperate for a victory to take to voters after the failed campaign to repeal the Affordable Care Act.

Republicans are hoping to move it quickly through the House, with committee action penciled in for next week. Lawmakers aim to forward it on to the Senate later this month.

Senate Republicans are working on their own competing plan they aim to unveil next week. Lawmakers hope to land a compromise to Trump’s desk by the end of this year.

House leaders, who have written the plan in secret, have avoided identifying most of the tax breaks that would be quashed under the proposal in hopes of keeping lobbyists at bay.

But many Republican lawmakers have little inkling of what’s in the bill, and the strategy means leaders have not had much opportunity to build support among rank-and-file members for controversial proposals.

Tax writers worked late into the night Wednesday to put the finishing touches on the legislation, which comes after months of closed-door negotiations. Nonetheless there will likely still be blanks to fill in as the Ways and Means committee moves to take up the legislation next week.

One question is over the fate of a proposal to push people out of 401(k) retirement plans, where savings are taxed when they are withdrawn, and into Roth accounts where they are taxed at the outset.

A GOP tax writer and congressional staffers told POLITICO late Wednesday the House had dropped the idea, but the situation was still fluid and could shift again before the tax-writing committee formally takes up the legislation.

Other issues that may get some clarity on Thursday include whether corporate tax cuts will be temporary or permanent and if a compromise on the state and local tax deduction will be enough to bring around balking lawmakers from high-tax states.