Published: Mon, November 13, 2017
Worldwide | By Isabel Fisher

Brady: House Won't Accept Repeal of State, Local Tax Deductions

Brady: House Won't Accept Repeal of State, Local Tax Deductions

The head of the House of Representatives' tax-writing committee said on Sunday he would not accept elimination of a federal deduction for state and local taxes, opposing a proposal from Senate Republicans that would hike taxes for some middle class Americans.

On Thursday, the Republican-led Senate issued their own version of a new tax code - a harsher version of the House plan.

Among the biggest differences: The House bill allows homeowners to deduct up to $10,000 in property taxes. The House's version of the bill released earlier kept property tax deductions up to $US10,000.

The House bill would cut corporate taxes starting next year.

White House economic adviser Gary Cohn said both plans adhere to Trump's two main objectives in overhauling the tax code: a tax cut for middle-income Americans and a deep reduction in the corporate tax rate to make USA businesses competitive. He said his state sends more tax money to the federal government than it gets back, and that the House bill would have a "devastating" impact on taxpayers in areas such as Long Island. According to the House Republicans, the proposed tax reform cuts is planned to be implemented immediately.

Brady said there were many similarities in the rival tax proposals.

"This matters a lot for the Berkshires: The way the tax cut is designed, most of the benefits are going to people at the top of the income distribution, most of the direct benefits", said Jon Bakija, a Williams College economics professor and chair of the political economy program. "If we cut revenue a lot, that makes it more likely we're going to have to cut Medicaid, Medicare and Social Security, and people in Berkshire County depend a lot on those things". The House would keep the highest income-tax bracket at 39.6 percent. "It could be because these (proposed tax) incentives are supposed to, and they might, lead to an investment in business and equipment and higher wages, but it could also be because people don't believe those arguments and that's why it's not polling well". Schumer said, "They actually hurt middle-class people because they need to give those big breaks for the wealthiest". Senate Majority Leader Mitch McConnell, R-Ky., also acknowledged on Friday in a New York Times interview that he had erred when he said that "nobody in the middle class is going to get a tax increase". Asked if he would guarantee that to Republican members of Congress facing re-election next year, he said, "I can".

"Repealing the estate tax alone would lose an estimated $269 billion over 10 years - more than we would spend on the Food and Drug Administration, Centers for Disease Control, and Environmental Protection Agency combined", the letter stated.

Meanwhile, on the other side of the aisle, Democrats are showing a united front on opposing the tax plan.

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