U.S. Republicans on Tuesday appeared to be nearing a deal on state and local taxes that would preserve a federal deduction for property taxes but not income taxes, potentially removing a major obstacle that could derail their impending tax overhaul plan.
Republican Representative Tom Reed of New York said the “sweet spot” compromise was gaining support among high-tax state lawmakers who have signaled their opposition to a proposal to repeal the state and local tax, or SALT, deduction.
The compromise “goes a long way to listen to their plight, respond to their needs,” Reed told reporters on Capitol Hill.
The popular, long-standing federal deduction for state and local taxes is just one tax provision targeted by Republican tax writers and President Donald Trump in a plan they hope to enact into law before the end of 2017.
House of Representatives Ways and Means Committee Chairman Kevin Brady told reporters that he would meet on Tuesday evening with lawmakers concerned about the SALT deduction. The text of the bill is expected to be released on Wednesday, he said.
The SALT compromise would reduce, but not eliminate, a disproportional tax impact on upper middle-class families in high-income tax states such as New York, New Jersey and California. Those states send enough Republicans to Congress to derail a tax bill.
If a SALT deal enables Republicans to pass tax legislation, it would be Trump’s first major legislative achievement since he took office in January, with Republicans controlling both chambers of Congress.
Other elements of the tax-cut plan remained up in the air, including proposals affecting retirement savings, small businesses and business interest payments.
The House bill is expected to cut the top corporate income tax rate to 20 percent from 35 percent; phase out the estate tax paid by the wealthiest taxpayers over two or three years; and may set a repatriation rate for U.S. businesses with profits overseas, according to a source familiar with a Tuesday meeting between House Speaker Paul Ryan and conservative groups.
It is also likely to set a 15 percent minimum tax on active foreign income of U.S. corporations, according to lobbyists with knowledge of negotiations.
Trump said at the White House he wants Congress to pass tax reform bills by the U.S. Thanksgiving holiday on Nov. 23.
Reference: Reuters
Read more: http://www.reuters.com/
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