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US: Republicans roll out sprawling tax bill

The party is under intense pressure to score a major legislative victory in 2017, and Trump has made it clear he wants the tax bill on his desk before the end of the year.

Published: 02nd November 2017 08:58 PM  |   Last Updated: 02nd November 2017 08:58 PM   |  A+A-

President Donald Trump (Photo | AP)

By AFP

WASHINGTON: US Republican leaders were unveiling a tax bill Thursday that slashes corporate rates and maintains the top tax bracket for millionaires, but the measure faces scepticism despite a push from President Donald Trump.

Simmering disagreements persisted over what should end up in the bill, the largest tax overhaul since Ronald Reagan's 1980s presidency.

The effort, conducted largely in secret, is seen by many Republicans as a shot at political redemption after they and Trump failed in their high-stakes bid to repeal and replace Barack Obama's signature health care reforms.

The party is under intense pressure to score a major legislative victory in 2017, and Trump has made it clear he wants the tax bill on his desk before the end of the year.

But 11th-hour changes -- including a possible repeal of a crucial element of Obama's health care law -- could threaten to sink the bill once it is released.

Shortly before the scheduled 11:15 am (1515 GMT) Thursday unveiling, key details began to trickle out, including news that the corporate tax rate would be permanently lowered to 20 percent from 35 percent, Republican lawmakers briefed on the bill told US media.

It roughly doubles the standard deduction that individuals and families can claim on their taxes, and expands the child tax credit, while eliminating a raft of "special-interest deductions," according to a summary obtained by Bloomberg.

Critically, the bill also keeps the top rate for wealthy tax-payers at 39.6 percent, rather than 35 percent as proposed in September under the White House tax outline. 

But it raises the threshold for that bracket to $1 million for married couples, from the current $470,700, CNN reported.

It also limits the home interest home interest deduction to loans up to $500,000, according to reports.

"We are introducing legislation that will cut your taxes & make the entire system more simple," tweeted House Speaker Paul Ryan ahead of the rollout. "This will be a game-changer."

No Democrats are publicly backing the plan, so Republicans need nearly all their members on board.

Senate rules allow for the measure to add $1.5 trillion to the deficit over 10 years. But with the cuts expected to cost far more, tax-writers have scrambled to find other ways to boost revenues and cut spending to cover the costs.

Some rank-and-file members from high-tax states like New York and New Jersey soured on a plan to curb local tax deductions as a way to pay help cover the cost.

A compromise was reportedly struck, so that homeowners will be able to write off property taxes up to $10,000, while other state and local deductions may be eliminated. 

Tensions soared as House leaders missed their self-imposed Wednesday deadline for unveiling their bill.

Trump has scheduled a White House meeting with chief tax-writer Kevin Brady, who chairs the House Ways and Means Committee, and other Republicans later Thursday before departing on a 12-day trip to Asia.

The negotiations recently proceeded on multiple fronts, including over a controversial Republican plan to limit Americans' tax-deferred contributions to their 401(k) retirement accounts.

The bill reportedly maintains current 401(k) rules.

One wrinkle: Trump Wednesday urged Republicans to ditch the Obamacare provision that requires individuals to have health insurance or pay a fine.

"Wouldn't it be great to Repeal the very unfair and unpopular Individual Mandate in ObamaCare and use those savings for further Tax Cuts... for the Middle Class," Trump said on Twitter.

It was unclear whether Trump's call was being heeded.

A 2016 congressional study estimated that repealing the individual mandate would save $416 billion, but would raise insurance rates and lead to 15 million more people without coverage.



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