Published: Tue, November 14, 2017
Industry | By Dora Warner

TAX REFORM: Tax jump for households earning under $200K

TAX REFORM: Tax jump for households earning under $200K

His panel is launching into work on the Senate version of Republican tax legislation that steeply cuts corporate taxes, doubles the standard deduction, and aims at the biggest revamp of the USA tax system in three decades.

Trump praised new bills in the House and Senate, called the Tax Cuts and Jobs Act (TCJA), but suggested a few improvements.

"The House's so-called "compromise" would be saying to the middle class we'll only chop off four of your fingers instead of all five", Schumer said in a statement.

Hatch is downplaying a new analysis by congressional tax experts showing that 13.8 million moderate-income households actually would see their taxes increase in 2019 under the Senate proposal.

The analysts found a similar magnitude of tax increases under the House bill. Ron Wyden of OR, says the legislation has become "a massive handout to multinational corporations and a bonanza for tax cheats and powerful political donors".

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Republicans have weighed repealing the individual mandate in recent weeks, which the Congressional Budget Office estimates would free up $338 billion over ten years for tax reform.

In the case of the House bill, the top rate would stay at the current 39.6 percent but would apply it to a higher income threshold: For married couples, it would only kick in after the first $1,000,000 in income versus $470,000 now.

The analysis of the Senate plan says 13.8 million households, or about 10 percent of all taxpayers, would face a tax increase of $100 to $500 in 2019.

President Donald Trump pushed Republicans on Monday to cut taxes on the rich by using money that's slated to help lower-income Americans purchase health insurance. Trump tweeted from Asia, where he is attending an economic summit in the Philippines. There also would be increases greater than $500 for a number of taxpayers, especially those with incomes between $75,000 and $200,000. 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".

Trump said the bill should include the repeal of Obamacare's individual mandate.

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Underscoring the difficulty, the chairman of the House Ways and Means Committee said Sunday he was certain that chamber won't go along with the Senate's proposal to eliminate the deduction for property taxes, setting up a major flashpoint.

A key feature of both bills is a reduction in the corporate tax rate from 35 percent to 20 percent. The House bill would eliminate existing federal tax breaks for state and local income or sales taxes, but preserve a property-tax deduction capped at $10,000.

"What we've worked so carefully with our lawmakers from NY and California and New Jersey is to make sure we deliver this relief", Brady said.

"It's important to make sure that people keep more of what they earn, even in these high-tax states", Brady said during an appearance on "Fox News Sunday".

The Senate's tax-writing committee will wade through its newly unveiled measure starting Monday.

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Brady's committee approved its bill last week, and it's headed for a planned vote of the full House this week.

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