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House, Senate GOP leaders reach agreement on tax package

House, Senate GOP leaders reach agreement on tax package

House and Senate GOP leadership have reached a preliminary deal on the tax bill.

Negotiators also agreed to set the corporate income tax rate at 21 percent.

"I think we've got a pretty good deal", Senate Finance Committee Chairman Orrin Hatch told reporters as he prepared to join other Republicans for lunch with Trump.

When the same report tries to estimate how much growth the tax cuts would actually produce, it also finds that the national debt would likely increase by at least $1 trillion during the next decade.

According to two GOP aides, Republicans struck a deal in principle that will meld together the House and Senate tax deals and put the parties on a path to vote as soon as next week.

Senate Democratic Leader Chuck Schumer called on Republicans to delay a vote on overhauling the tax code for the first time in 30 years until Jones can be seated, but that was unlikely.

President Donald Trump wants to sign a tax bill by year's end, potentially marking the Republicans' first major legislative victory since Trump's victory gave the party control of the White House as well as both chambers of Congress.

Among the provisions that have majority support: The GOP bill will almost double standard deductions for individuals; double the child tax credit from $1,000 to $2,000; cut the tax rate on small businesses; reduce overall tax rates for individuals; eliminate the ObamaCare mandate; and get rid of the alternative minimum tax for most people, while keeping it for companies.

Trump said the cut in the corporate rate may be ticked up one percentage point to 21 percent, which is still a significant drop from the current 35 percent. He added that it is "very important" to vote on the legislation next week.

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In remarks at the White House on Wednesday afternoon, surrounded by families from across the country, Trump promised a bill featuring "massive tax relief" within days.

A group of NY and New Jersey Republicans voted against the House bill over state and local deduction concerns.

It also reduces the tax deduction for pass-through companies (the majority of businesses, which are taxed through the owners' personal taxes) to 20 percent, down from 23 percent in the original bill.

The nonpartisan Joint Committee on Taxation and Congressional Budget Office have both concluded that wealthier taxpayers would disproportionately benefit from the Republican proposals.

When asked who stands to benefit most from Republican tax legislation, more than half of American adults selected either the wealthy or large US corporations, according to a Reuters/Ipsos poll released on Monday.

The first and second compromise options ITEP analyzed earlier this week would attempt to address this problem by allowing some taxpayers to deduct a limited amount of state and local income tax. The tax bills passed by the House and Senate would both eliminate deductions for state and local income taxes and cap deductions for property taxes at $10,000.

Business and conservative groups lobbied hard for the 20 percent corporate rate.

At a tax event held by Democrats, Moody's Analytics Chief Economist Mark Zandi said the Republican bill, if enacted, would cause interest rates to rise, meaning the benefits of a lower corporate tax rate would be "completely washed out".

The provision would not affect current mortgages.