(Bloomberg) -- House Republican leaders began rolling out a tax bill Thursday that contains sweeping changes for business and individual tax rates, but leaves 401(k) plans alone.
The bill will include “no changes” to popular 401(k) retirement plans, according to a House memo. And the bill is not expected to repeal the Obamacare individual mandate.
It would cut individual tax rates for millions of Americans, but not for earners at the very top of the scale, lawmakers have said. Keeping the top rate at 39.6% won’t please conservatives who want across-the-board cuts.
The bill would cap the mortgage-interest deduction on new home sales at $500,000 — a departure from the current cap of $1 million for couples filing jointly, according to a memo written by the House Ways and Means Committee.
It would also impose a tax of as much as 12% on multinational companies’ accumulated offshore earnings, a GOP lawmaker said — a rate that’s higher than either President Donald Trump or House Speaker Paul Ryan have proposed. It would phase out the estate tax over years, more slowly than either of them would prefer.
Next steps
The legislation won’t satisfy everyone, but it represents Trump’s last chance for a major legislative victory in his first year. To pass it by Christmas, as the president has called on Congress to do, lawmakers must prevail over a series of challenges with no real margin for error. The first test comes Monday, as the House Ways and Means Committee is scheduled to take up the bill.
The long-awaited legislative text arrives Thursday, the same day that Trump is expected to name Federal Reserve Governor Jerome Powell to the top job at the U.S. central bank. The former private-equity executive favors continuing gradual interest-rate increases and would preside over what Trump has promised as robust growth — should the planned tax overhaul come to fruition. “Push Biggest Tax Cuts EVER,” Trump said on Twitter Wednesday.
The 2018 budget resolution approved by the House and Senate allows for tax legislation that would increase the federal deficit by $1.5 trillion over 10 years, before accounting for any growth that might result from the changes. Figuring out how to achieve the deep rate cuts that Trump, Ryan and others want while staying within that bright line has complicated the bill drafters’ task. Earlier this week, House officials postponed the legislation’s planned release by one day.
On Thursday, they’ll unveil a bill that took months to write. It may be rewritten over the weekend, at least in part — though which provisions would change is unclear.
House Ways and Means Chairman Kevin Brady, the Texas Republican who’ll manage the bill, said late Wednesday that he may have a revised version in time for Monday’s hearing. “Are there some areas where we’ve asked people to bring solutions? Yeah,” he said.
Representative Carlos Curbelo, a member of the panel, said there “may be some” differences in the legislative text by the time the committee begins its work. “It’s settling; it’s all settling,” he said. Details began to emerge late Wednesday.
