With late changes, House Republicans ready to unveil tax reform bill

Credit: Jamie Dupree

Credit: Jamie Dupree

Under pressure from President Donald Trump to get moving on major tax reform legislation, Republicans in the U.S. House prepared to finally reveal the details of the bill on Thursday, as they pushed reluctant GOP lawmakers to sign off on the plan, struggling with the size and cost of the measure, and going back and forth on whether to make a centerpiece reduction in corporate taxes into a temporary - not a permanent - tax cut.

The big flash point through the day on Wednesday continued to be a GOP plan to limit the ability of taxpayers to deduct state and local taxes, as well as property taxes on their federal returns, as it faced strong opposition from Republicans who represent more urban districts.

"It's a geographical redistribution of wealth that picks winners and losers," argued Rep. Lee Zeldin (R-NY), who with other members from New York and New Jersey were in talks with key Republicans and Trump Administration officials, in search of a last minute deal.

"It's important that whatever gets proposed is not on the back of my home state," Zeldin told reporters.

There was also a last minute push involving health care, echoing the failed effort by the GOP to overhaul major parts of the Obama health law - as Republicans were talking about maybe adding a provision related to the individual mandate.

Because of the rules of budget reconciliation - which allow the GOP to avoid a filibuster in the Senate - you can't really repeal the individual mandate, but you could reduce the penalty for not buying health insurance to zero as a way to get around the Obama health law.

"We should repeal individual mandate - unfair IRS fines on 6 million people - and fund big, bold tax cuts," said Sen. Ted Cruz (R-TX) on Twitter, noting an earlier tweet from the President suggesting the same type of late add to the tax bill.

Here are some of the other details to look for on Thursday.

+ How many of the provisions are permanent, and how many are temporary? Dealing with complicated rules under the budget reconciliation process - just like with health care - it was always assumed that some of the GOP tax reform plan would be temporary, just like the 2001 and 2003 tax cuts were under President George W. Bush, as those were phased out after ten years. The same thing was being considered with one of the biggest pieces of the plan, a cut in corporate taxes. Back in June, House Speaker Paul Ryan scoffed at the idea of temporary tax cuts, saying those don't spur economic growth. "Every expert agrees that temporary reforms will only have a negligible impact on wages and economic growth," the Speaker said in a speech to the National Association of Manufacturers. But, that may be where the GOP is heading with this tax reform bill.  It will be interesting to see what's permanent, and what is not.

+ What will be the exact changes on tax brackets? For most Americans, this will be the most important detail to come out of the GOP plan on Thursday. What tax bracket would I be in? How much different than the current system? Under current law, there are tax brackets of 10%, 15%, 25%, 28%, 33%, 35% and 39.6% - originally, the GOP wanted only three income tax brackets, but there may be a fourth for the highest income earners. No matter whether you have three or four tax brackets, the income level for those remains very important. At this point, most lawmakers are in the dark on those type of details - in fact, most every Republican in the House hasn't seen the entire bill, which should be hundreds of pages long.

+ Already there are signs of opposition. Yes, most business groups are on board, but there were unsettling signs for the GOP in recent days from both the National Association of Home Builders, and the National Association of Realtors. The Home Builders vowed to oppose the bill, because of how it would deal with the ability of individual taxpayers to write off mortgage interest, as well as state and local taxes. "This tax blueprint will harm home values, act as a tax on existing home owners and force many younger, aspiring home buyers out of the market," said Granger MacDonald, chairman of the National Association of Home Builders. The group said it work against the plan, and issued this tweet in opposition, even before the fine print was made public.

+ Other warnings from lawmakers in Congress. When it comes to what will cause Republicans to turn against the details of this tax plan, at the top of the list would be what happens on the deduction for state and local taxes. Congress tried to get rid of that in 1986, but failed. And a number of GOP lawmakers from the East Coast - plus in Texas - don't like what they hear. For others, it's individual items like the size of the child tax credit, the details of the estate tax and more. "I cannot imagine a single person here voting for a tax reform package that does nothing on the child tax credit," said Sen. Marco Rubio (R-FL), who warned that such a plan would raise taxes on many middle class families.

Check back in the afternoon for more of the details.