House GOP tax plan keeps top rate & eliminates deductions

America’s top earners will not see their taxes slashed in the overhaul House Republicans are unveiling today.

House Majority Whip Steve Scalise told Fox & Friends in a Thursday morning appearance the tax cut plan does not lower the top bracket like a draft backed by President Trump proposed.

Congressional Republicans also decided eliminate state and local tax deductions despite the fierce pushback they received from legislators who represent high-taxed states.

‘They’re actually gonna come out better. A lot of their constituents are gonna see a real tax cut under this plan,’ Scalise said of those members on Fox & Friends.

The House Ways and Means Committee will reveal the full bill later this morning at a news conference after a daylong delay as lawmakers continued to bicker over the details. 

America’s top earners will not see their taxes slashed in the overhaul House Republicans, led by Ways and Means Chairman Kevin Brady, are unveiling today.

Scalise confirmed Thursday morning that the House Republican bill keeps the Trump administration’s proposed brackets of 12 percent and 25 percent for middle-income earners and leaves the top rate right where it is at 39.6 percent.

Republican leaders agreed after negotiations with the president to kill the top bracket, giving the rich an almost five percent tax cut. 

Trump said they could put it back if that made his total tax package an easier pill to swallow, although it was not his administration’s preference.

Scalise said Thursday on Fox, ‘The top rate is still in place.’

‘But again more income is going to be taxed at the lower rate, which is a win for everybody, and again, really for the middle class. They’re gonna see on average about $4,000 more in their pocket,’ the GOP leader said.

Scalise affirmed that a doubling of the standard deduction remains in the bill, ensuring that individual filers don’t pay taxes on the first $12,000 they make. 

For joint filers, the first $24,000 of income will not be taxed, if the GOP plan becomes law.

‘This is gonna be a great win for middle-class families, blue-collar workers,’ Scalise stated. 

The Washington Post also reported some details on what the Republicans plan to do about mortgage interest deductions. 

Tax deductions would be capped at $500,000 on new mortgages. The current tax code’s cap is $1 million. 

This could impact Americans living in large, high-cost cities including San Francisco, New York, Boston and Washington, D.C. – cities that didn’t vote for President Trump in last year’s presidential election. 

The bill would allow people to deduct the first $10,000 of local property tax from their federal tax bill. 

The legislation creates a new ‘family credit’ that bumps the child tax credit from $1,000 to $1,600. 

House Majority Whip Steve Scalise told Fox & Friends in a Thursday morning appearance the tax cut plan does not lower the top bracket like a draft backed by President Trump proposed

House Majority Whip Steve Scalise told Fox & Friends in a Thursday morning appearance the tax cut plan does not lower the top bracket like a draft backed by President Trump proposed

Originally, the GOP planned to debut the legislation Wednesday with House Ways and Means Committee Chairman Rep. Kevin Brady telling reporters Tuesday ‘our plan it to release the bill tomorrow.’ 

Then came a late-day statement from Brady Tuesday announcing a delay in the big reveal. 

‘We are pleased with the progress we are making and we remain on schedule to take action and approve at our Committee beginning next week,’ the Texas Republican said Tuesday night. 

On Wednesday morning, Brady posted a selfie on Twitter, showing the world a happy face. 

‘At my desk, wearing my #Astros tie, putting final touches on the first bold #TaxReform in 31 years,’ he wrote, also giving a shout-out to his baseball team, which went on to win the World Series last night against the Los Angeles Dodgers.

On Wednesday morning, Brady put on a happy face for this selfie - noting how Republicans were trying to enact a 'bold' tax reform plan, the first in 31 years as the bill ran into hurdles

On Wednesday morning, Brady put on a happy face for this selfie – noting how Republicans were trying to enact a ‘bold’ tax reform plan, the first in 31 years as the bill ran into hurdles

President Trump (left) met with Brady, the House Ways and Means Committee chairman, at the White House last week. Trump suggested yesterday, via Twitter, that lawmakers repeal the Obamacare  individual mandate as part of the tax package

President Trump (left) met with Brady, the House Ways and Means Committee chairman, at the White House last week. Trump suggested yesterday, via Twitter, that lawmakers repeal the Obamacare  individual mandate as part of the tax package

Behind-the-scenes, however, things did not come together quite so nicely.

GOP lawmakers must find a way to lower the corporate tax rate to 20 per cent and ensure that other provisions of the bill don’t add to the deficit after 10 years.

The administration is relying on substantial economic growth to do the job for them, but some lawmakers aren’t so sure that will be the case.

President Trump has also tried to prevent Republicans on the Hill from meddling with Americans’ 401(k)s.

Right now people under 50 can stow $18,000 a year tax-free, until the individual takes out the money.

Politico reported, however, that Brady wanted to keep the option on the table.   

Lawmakers from high-tax states are also concerned about another Republican idea – killing off Americans’ ability to deduct their state and local taxes when calculating their federal tax bill. 

Scalise said Thursday that measure remains in the bill and leadership had been working with representatives from affected areas, including Illinois, Minnesota, New Jersey, New York and California.

On Wednesday, President Trump also chimed in with another provision he had in mind. 

‘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,’ the president tweeted. ‘The House and Senate should consider ASAP as the process of final approval moves along. Push Biggest Tax Cuts EVER.’ 

Brady had already put the kibosh on that. 

‘What I don’t want to do is to add things that could kill tax reform like health care died over there,’ Brady said on Hugh Hewitt’s radio show the day before. 

The ‘there’ he was referring to was the Senate, as the House had successfully passed an Obamacare repeal bill, however the effort died in Congress’ upper chamber. 

Brady, according to the Washington Examiner, said he would add in a repeal of the individual mandate if the measure made it through the Senate first. 

At the White House Wednesday, Trump praised the House’s efforts. 

‘The House is doing very well,’ the president said. ‘They are taking an extra few hours, which will go into tomorrow,’ he said, seemingly not minding the delay. 

‘And they’ll be announcing and I’ll probably be standing with them,’ Trump added, saying he would like the roll-out to occur before he leaves for Asia Friday morning. 

The president had come up with a name: ‘The Cut Cut Cut Act,’ according to ABC News, but lawmakers weren’t pleased, with the House Ways and Means Committee getting a final say.

On Thursday it was being referred to as the Tax Cuts and Jobs Act.  

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