“You have to look at the whole picture”, Rep. Tom Reed (R-N.Y.) told MSNBC.
Yoho and colleagues including Reps. Under the bill, for new mortgages, they would only be able to deduct interest payments made on their first $500,000 worth of home loans. “Let’s slow down and get this right”. While there are certain income restrictions that go along with that, the deduction as it stands now counts as “above-the-line”, applying directly to taxable income.
U.S. Reps. John Faso, R-Kinderhook, and Elise Stefanik, R-Essex County, released statements on the Republican tax bill just before 2:45 p.m. Thursday.
The bill kills the state and local tax deduction, called SALT, which allowed people to deduct what they paid to local municipalities and states from their federal income tax bill.
That may sound good, but it has the effect of encouraging state and local governments to tax at higher levels.
“Today, Republicans will crow about reaching a “compromise” on state and local whereby they don’t eliminate the deduction; they just reduce its value by about 70 percent”, Schumer said.
That’s a concern that Byrne, who represents towns and cities along Alabama’s Gulf Coast, shares.
“This is the beginning of the end of this awful tax code”, Brady told reporters on Thursday as he entered a meeting with Republican lawmakers ahead of the bill’s release.
Critically, it keeps the top rate for wealthy tax-payers at 39.6%, rather than 35% as proposed in September under the White House tax outline. I will be working with my colleagues in the NY delegation to improve this plan to provide real tax relief for New Yorkers and to address the issue of state and local tax deductions. Already some Republicans had expressed concerns and powerful lobbying groups like homebuilders had expressed opposition.
Two powerful trade associations slammed the GOP’s tax plan on Thursday, reports Business Insider’s Akin Oyedele, saying the reduction of a key benefit for homeowners could hurt the market.
The tax bill released by House Republicans on Thursday does exactly that.
“What we are seeing today is a plan that exacerbates the unfairness and inequality in our tax code”, said top Senate Democrat Chuck Schumer of NY. “We’ve been hearing a lot about cuts, cuts, cuts”. When that happens, it’s going to reopen some of the same schisms that erupted during the futile attempts to repeal ObamaCare, and it’s going to get very tough to find a simple majority in either chamber to back the package. Getting rid of this exemption brings in another $1.5 trillion. But it might muddle the issue enough that some Republicans from those states might still vote for the bill.
Yoho and other GOP Congress members did not seem to think that the tax bill would add substantially to the deficit.
House Republicans apparently caved into pressure and dropped their idea for limiting pre-tax 401 (k) contributions, which could have given them hundreds of billions of extra funds to work with in the first decade, while lowering USA tax receipts beyond the budget window. The estate tax, also known as the death tax, is now a 40 percent levy on estates greater than $5.49 million for individual filers or about $11 million for married couples.
“So that redesign for simplicity, fairness, and competitiveness – I predict under this tax reform plan America will vault from 31st in the world among our competitors to the top three as the best places on the planet for that next new job, that next new manufacturing plant, that next new research headquarters – that’s what’s different”, he said.