Chairman: House won't agree to nix property tax deduction

Property taxes

Andy Kiersz Business Insider data via Trulia

The House of Representatives wouldn't accept a tax bill that, like the Senate's, eliminates deductions for all state and local taxes, the chairman of the House's tax-writing committee said.

Republicans in the U.S. Senate have rolled out their tax reform plan to join what the Trump Administration and the U.S. House have offered.

Among the biggest differences: The House bill allows homeowners to deduct up to $10,000 in property taxes.

The new tax plan, which lowers the corporate tax rate, eliminates tax deductions and modestly lowers income tax rates, is being billed by Republicans as a stimulus for the national economy, while detractors are calling it another version of "trickle-down" economics.

Ways and Means Committee Chairman Kevin Brady says on "Fox News Sunday" that Republican leaders in the House want people to keep more of what they earn regardless of where they live.

Some taxpayers will win and some will lose in a swap of school property taxes for higher state income taxes, said Jay Brower Jr., a certified public accountant and a partner in Marks Paneth LLP in Jenkintown.

The House bill would cut corporate taxes starting next year. By doing so, the GOP could then chop the top individual income tax rate to 35 percent with "all the rest going to middle income cuts", the president contended.

Sanders' cautionary tale had laid out how any tax cut should be expected to benefit the wealthy the most because affluent people pay the most taxes.

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

Although most European shares were not affected by the news, most US stocks declined with the S&P 500 index losing its eight-week high.

Some adjustments to the House bill were made this week, including reinstatement of the adoption tax credit and a new 9 percent tax rate for small businesses making less than $75,000.

Both the House and Senate plans would add $1.5 trillion over 10 years to the budget deficit and national debt, an increase that has anxious some fiscally conservative Republicans.

The nonpartisan Congressional Budget Office estimated last week that repealing the individual mandate would save Republicans $338 billion over the next 10 years and would give them additional revenue to cut taxes. They would rather see the government use the funds to invest in education, research and roads that benefit everyone and to ensure safety net programs like Medicaid aren't cut.

Speaker Robert DeLeo says he expects House and Senate negotiators to work on a compromise bill while the Legislature is in recess for the remainder of 2017, with a possible final vote to be taken early next year.

"Republicans should go back to the drawing board and fully restore the SALT deduction", he said in a statement.

American millionaires and billionaires are banding together to urge Republicans in Congress to raise their taxes instead of cutting them.

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