House Republicans delayed the release of their tax bill Tuesday night, a sign that the GOP leaders still have not resolved disputes between its members over tax breakers and how to pay for tax cuts.
The bill was scheduled for release on Wednesday but Republican leaders announced late on Tuesday that the bill would not be released until Thursday. They insisted, however, that the bill remains on track to pass out of committee as early as next week and to be voted on by the full House before Thanksgiving.
“In consultation with President Trump and our leadership team, we have decided to release the bill text on Thursday,” Rep. Kevin Brady, the Texas Republican who chairs the House Ways and Means Committee, said in a statement. “We are pleased with the progress we are making, and remain on schedule to take action and approve a bill at our committee beginning next week.”
Although the bill has not been officially released, details of the bill have emerged in statements from lawmakers. Here’s what we think we know at this point.
- No Corporate Tax Phase-In. House Speaker Paul Ryan told conservative groups on Tuesday that the bill would immediately cut the corporate tax rate to 20 percent. This appears to signal that earlier proposals to phase in the corporate tax cuts over five years have been rejected.
- Phase-In for Death Tax. Ryan also said that the end of the death tax would phased-in over several years, instead of ending all at once.
- A Property Tax Compromise for State and Local Taxes. The draft released Thursday is expected to preserve a federal tax deduction for at least some state and local property taxes, perhaps capped at a certain level. Deductions for income taxes and sales taxes would be eliminated. This would benefit that states that rely on property taxes rather than income taxes.
- A Higher Top Individual Rate. The draft bill will include a higher rate for top earners, above the 35 percent rate that Republicans included in their framework released in September, according to a person who attended the Ryan briefing. Ryan did not say if this would be in the form of a surcharge on income above a certain level, a continuation of the current top rate of 39.6 percent, or the even higher rate advocated for by Steve Bannon and other populist conservatives.
- Corporate Tax Territoriality. The bill will move U.S. corporate taxes on to a territorial basis, taxing only income earned domestically so long as it is taxed in the jurisdiction where it is earned.
- A Global Minimum Backup Tax. To prevent companies from moving income into tax havens, the bill will include a backup tax rate on global income that would apply to income earned in jurisdictions where tax rates are below a certain minimum.
- Deemed Repatriation. The draft bill will include a provision that deems accumulated but untaxed corporate earnings held abroad to be repatriated, subjecting them to a special tax rate that is lower than the current corporate rate and lower even than the proposed 20 percent rate.
- Retirement Savings Still in Play. Efforts to cap contributions to 401(k) retirement plans, which allow taxpayers to shield money from taxes until it is withdrawn from tax protected savings accounts, were still under consideration on Tuesday, according to two people familiar with the matter. This is one of the provisions being considered to limit the short-term budget effects of tax cuts by raising revenue. Critics say it will discourage savings, hurt the middle class, and does nothing to address the longterm fiscal effects of tax cuts.
- Child Tax Credits Still In Flux. The size of the child tax credit, and whether it will be refundable against other taxes, is still a mystery. A rise in the credit, and allowing it to be refundable against payroll taxes, is crucial to cutting taxes for many middle income families.
President Donald Trump pushed back against Democrat claims that the bill’s tax cuts would mostly benefit the wealthy.
“The Democrats will say out tax bill is for the rich, but they know it’s not,” Trump said in a meeting with business leaders.
Trump added that he wants the House to pass a bill by Thanksgiving so that he can sign tax reform into law by Christmas. And he contradicted reports that the bill would include only tax cuts rather than broad overhaul.
“It will be the biggest tax event in the history of our country,” Trump said.