GOP trying to woo advocacy group support for tax plan

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House Republicans announced late Tuesday they will delay the planned release of their long-awaited tax bill from Wednesday to Thursday, as lawmakers scrambled to hammer out differences amid a frenetic push to move forward on the GOP’s next big-ticket agenda item.

“In consultation with President Trump and our leadership team, we have decided to release the bill text on Thursday,” Ways and Means Committee Chairman Kevin Brady said in a statement.

Mr. Brady said lawmakers are “pleased” with the progress they’re making and are still on track to take up the bill in his committee next week as scheduled.

Mr. Trump, who says he wants to sign a bill into law by year’s end, also offered words of encouragement.

“The Republican House members are working hard (and late) toward the Massive Tax Cuts that they know you deserve. These will be biggest ever!” Mr. Trump tweeted Tuesday evening.

But the delay could foreshadow what’s likely to be a bruising battle in the coming weeks and months over which individuals and groups stand to benefit — or lose — under the proposal.

Shortly before his statement, Mr. Brady had emerged from a meeting with committee members at the Capitol to say there was no announcement of a schedule change, amid reports of a potential delay.

“We are very close to what we set out to do — bold, pro-growth tax reform,” Mr. Brady said. “A lot [of] work remains with the drafters right now. They will continue to work through the night. We are moving forward.”

Mr. Brady had already said earlier Tuesday the draft he had planned to release this week won’t be the same bill he’ll bring to his committee for votes next week, suggesting just how much tweaking still remains — regardless of when the initial bill gets unveiled.

In one last-minute change, GOP leaders were working toward a deal that would preserve deductions for local property taxes but will ax a deduction for state income tax payments.

But other specifics — such as where the actual thresholds for the tax rates will be, or how big a boost the child tax credit will get — were still under discussion Tuesday evening.

The deal on state and local taxes was a major concession to blue-state Republicans. The GOP framework released last month called for the complete elimination of the state and local tax deduction, known as SALT.

But blue-state Republicans protested, saying their middle-to-upper income constituents would face tax hikes if the break got eliminated.

Rep. Tom Reed, a Ways and Means panel member, said Tuesday that the compromise was gaining traction.

“It is very clear to me that the original proposal to eliminate, in its entirety, the state and local tax deduction is not going to occur,” Mr. Reed, New York Republican, said on a conference call with reporters.

The SALT deduction, estimated to cost between $1 trillion and $2 trillion, had emerged as one of the major remaining hang-ups, and nearly derailed a House vote on the Senate’s budget plan last week.

It’s also generated significant — and heated — opposition from Democrats.

In a scathing letter to President Trump on Tuesday, New York Gov. Andrew Cuomo cast Mr. Reed as a “Benedict Arnold” for supporting the GOP budget that’s paving the way for the tax overhaul.

“There is no middle ground here. Any of the proposed ‘compromises’ will still destroy New York’s economy and harm the middle class,” Mr. Cuomo wrote. “There can be no elimination, no ‘compromise,’ and no cap on state and local tax deductibility.”

Sen. Charles E. Schumer said the GOP’s compromise plan on SALT would still cost taxpayers $900 billion.

“The damage still remains, and don’t think a small compromise, a small haircut, can let you escape from the political whirlwind you will reap if you vote for this bill,” said Mr. Schumer, New York Democrat.

House Majority Leader Kevin McCarthy did confirm several other previously-discussed items that will be in the package: a doubling of the standard deduction, to $12,000 for individuals and $24,000 for couples, and the repeal of the alternative minimum tax.

The AMT is a parallel tax system Congress created in 1969 to stop wealthy individuals from avoiding paying taxes, and Republicans say it’s a needlessly complicated provision that’s outlived its usefulness.

Mr. McCarthy also told reporters they may expand the tax preferences tied to retirement savings plans like 401(k)s, to which taxpayers can currently contribute up to $18,000 a year in tax-deferred money.

“I’d like to see how much we can put away — raise that cap of how much we can put away tax-free,” he said.

Mr. Brady said later that incentives for 401(k) and IRA retirement plans would either be boosted or left the same, rather than trimmed, as had been suggested.

Republicans say they want to streamline the code and reduce the seven individual tax brackets to three or four: 12 percent, 25 percent, 35 percent, and potentially a fourth, higher bracket.

Grover Norquist, president of Americans for Tax Reform, said that if there is a fourth rate, it at the very least wouldn’t be higher than the current top rate of 39.6 percent. He said anything higher would violate his group’s pledge not to raise taxes, which many Republican lawmakers have signed.

Republicans also have to figure out how much to expand the existing child tax credit, which they say is a key part of delivering middle class tax relief, and whether to repeal the estate tax, which falls on mainly wealthier individuals.

Mr. Norquist said he anticipates the estate tax will be axed by both the House and Senate, even as GOP senators, like Susan Collins of Maine and Mike Rounds of South Dakota, have expressed reservations about a full repeal.

On the business side, Republicans were weighing a plan to potentially phase in lowering the corporate tax rate from 35 percent to 20 percent over a number of years, which would soften the immediate hit federal revenues would take from such a big cut.

The Republican budget allows for up to $1.5 trillion in deficit-financed tax cuts, and lawmakers risk blowing through that window if they cut taxes too deeply without finding enough exemptions to offset the cuts.

But Mr. Trump on Tuesday said he’s not interested in such a phase-in.

“We’re not looking for that. Hopefully not,” the president said.

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