When House Republicans released their bill last Thursday morning — one day after they initially said they would — they said it was not the final product. Far from it.
On the first day of the bill’s markup, tax-focused Ways and Means Committee Chair Kevin Brady (R-TX) offered an amendment that would delay the repeal of tax-free savings accounts for dependent care and amend the tax on private university endowments to affect schools with endowments amassing to $250,000 per student, instead of $100,000 per student, among other changes.
After months releasing vague outlines and broad plans, House Republicans are finally working through legislative text on tax reform.
Their proposal radically cuts the corporate taxes, collapses individual tax rates from seven brackets to four, and substantially expands the standard deduction and child tax credit for individuals.
The bill reduced the corporate tax rate to 20 percent from 35 percent, expands the child tax credit from $1,000 to $1,600, caps the state and local property tax deduction at $10,000, leaves retirement savings accounts unchanged, and reduces the tax rate for small businesses to 25 percent.
Republicans, frantically hoping to pass tax reform by Christmas — for fear that their first year controlling both Congress and the White House will come to an end with no major legislative victories — have spent weeks debating behind closed doors and avoiding the tough decisions.
This bill is House Republicans’ opening bid on tax reform, a proposal that will likely undergo a lot of scrutiny from the party and outside interests. The Senate is expected to release its own version of the bill this week, and plans to go through markup as soon as the House has concluded theirs. Then Republicans must come to an agreement between the two chambers.
Overhauling the nation’s tax code comes with a lot of winners and losers, and as Obamacare repeal already showed, Republicans can’t just expect their members to fall in line on a major agenda item. The party is unified in its goal to cut taxes, but has been struggling within its ranks over how deeply to lower rates and whether to pay for the tax cuts.
Read Brady’s amendment to the bill here: