Keep your hands off my retirement.
The GOP-controlled House passed the budget on Thursday by a slim margin of 216-212. With the House and Senate budgets in sync, the lawmakers have activated a procedure that will allow a tax bill pass the Senate without a filibuster.
The majority of Republicans that voted no hail from high taxed states since tax writers are toying with the idea to do away with state and local tax deductions.
The House’s initial plan, favored by fiscal hawks, would have required lawmakers to offset the costs of new tax cuts and to find $203 billion in extra savings from some welfare programs. But those requirements would not fly in the more moderate Senate, which passed its budget last week.
Under immense pressure to pass a tax reform bill by year’s end, Republican leaders struck a time-saving deal to forgo a formal conference committee to resolve differences between the House and Senate plans.
Although many House GOP lawmakers have derided that decision and complained about the final text, most rank-and-file Republicans still quickly resigned themselves to supporting the budget in order to move on to the GOP’s tax reform aspirations.
For their part, Democrats have seized on what they called the “hypocrisy” of fiscal conservatives backing a plan that would drive up the debt. The Senate budget envisions tax cuts that could add $1.5 trillion to the deficit over a decade.
Speaker Paul Ryan (R-WI) is pleased to move onto tax reform:
“Tax reform will help reignite the American dream,” House Speaker Paul Ryan told reporters after the vote. “It will help bring us back to a place of confidence, freedom, happiness and a stronger, healthier economy. And this budget that the House just passed, 20 minutes ago, brings us closer to making that dream a reality.”
House Ways and Means Committee Chairman Kevin Brady (R-TX) hopes to release the tax bill on November 1. He has closely guarded the talks around the bill even though President Donald Trump’s administration released a framework in September.
The committee will hold a markup session on November 6 “where the committee goes through the bill line by line and revamps the package before advancing it to the floor.”
The GOP-controlled Congress has become obsessed with tax reform since they have failed to repeal Obamacare each time it came up. If they can pass tax reform it’d be the first big victory of Trump’s administration.
The Texas congressman, speaking at a breakfast hosted by the Christian Science Monitor, said, “We think in tax reform we can create incentives for people to save more and save sooner.”
He said he was “working very closely with the president” on the issue and added that many people who have tax-incentivized retirement accounts contribute $200 per month or less, a level he thought was too low. “We think we can do better,” Brady said. “We are continuing discussions with the president, all focused on saving more and saving sooner.”
Several hours later, Senate Finance Committee Chairman Orrin G. Hatch (R-Utah) also said he would oppose Trump’s vow to protect 401(k) plans but that he was open to changes if they made sense. “I’m open to look at anything,” Hatch said Wednesday morning. “I don’t have any problem looking at everything.”
He also said he doesn’t feel pressure to change the Senate’s eventual tax bill because of pressure from the White House. “No I don’t think so,” Hatch said. “He has his point of view, and he may prove to be right in the end. We’ll just have to see. But I’m open-minded about it.”
Also, Brady wouldn’t provide “details about how he planned to change incentives to encourage more savings.” He said “that the current construct of 401(k) accounts and Individual Retirement Accounts was not working well.”
Brady has six days to release the bill, but as WaPo points out, the most pressing details have not been decided yet:
For example, he said he hasn’t decided what income levels would merit certain tax rates or how many tax deductions to eliminate to partially offset the lower rates. He said he hasn’t decided whether to impose a top tax rate for the wealthiest Americans or whether the tax cuts would be retroactive to income earned in 2017.
He also wouldn’t say how the tax bill would affect the type of taxes paid by hedge fund managers, even though Trump has promised to eliminate their special preferences.
“In about a week, you will be able to see the reforms proposed and where we are heading with it,” Brady said. He said he couldn’t guarantee that every American would see their taxes go down because of the changes, but he could “guarantee that every American will be better off because of a simpler tax code that lowers those rates and improves their paychecks.”
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