Sun, Nov 05, 2017 - Page 5 News List

Republican revisions to tax bill reduce generosity

INDIVIDUAL MANDATE:Trump has urged the scrapping of a healthcare law penalty through the legislation, which could reduce federal subsidies to make up for tax cuts

AP, WASHINGTON

Republicans in the US House of Representatives on Friday quietly made changes to their far-reaching tax overhaul: Now its tax cuts would be less generous for many Americans.

A day after Republicans unveiled their plan promising middle-class relief, the House’s top tax writer, US Representative Kevin Brady, released a revised version of the bill that would impose a new, lower-inflation “chained CPI [consumer price index]” adjustment for tax brackets immediately, instead of in 2023. That means more income would be taxed at higher rates over time — and less generous tax cuts for individuals and families.

The change, posted on the Web site of the US House Committee on Ways and Means, reduces the value of the tax cuts for ordinary Americans by US$89 billion over 10 years, compared with the legislation released with fanfare on Thursday.

For instance, as wages rise, middle-class taxpayers would have more of their income taxed at 25 percent instead of at 12 percent.

“The bill’s like a dead fish: The more it hangs out in the sunlight, the stinkier it gets,” US Senate Minority Leader Chuck Schumer said after word of Brady’s change. “The more people learn about this bill, the less they’re going to like it.”

The change to the plan frees up money for Brady, the committee’s chairman, to use to address concerns by lawmakers when changing the bill further next week. The Ways and Means panel begins work tomorrow, a final bill-writing process expected to take four days.

Brady on Friday called it “a challenge of a lifetime legislatively.”

US President Donald Trump and the Republicans are driving to push through a major tax-cutting bill this year to secure a legislative accomplishment, following their stinging failure to overturn and replace the Patient Protection and Affordable Care Act.

Republicans, facing increasing pressure to produce a marquee legislative win before next year’s elections, are promoting their tax plan as a spark for economic growth and a boon to the stressed middle class.

Brady, in a statement releasing the revised bill, said that “pro-growth tax reform that will deliver more jobs, fairer taxes and bigger paychecks for people across our country.”

While Trump and House Republican leaders stand united behind the plan, rank-and-file Republican lawmakers are divided and complaining about its potential blow to homeowners and the loss of a prized deduction that especially hits high-tax states.

Trump is pressuring Republicans to repeal a healthcare law penalty in the tax rewrite, a step that Brady indicated is politically problematic.

Brady on Friday said the president had implored him to scrap the so-called individual mandate that requires Americans to obtain health insurance or face a penalty.

“The president feels quite strongly about including this at some step,” Brady said in an interview with Politico.

The US Congressional Budget Office has estimated that repealing the individual mandate would save US$416 billion over a decade.

That is because without it, fewer people would enroll in Medicaid or buy federally subsidized coverage on insurance exchanges.

The money represents a tempting revenue source for Republican tax writers, whose plan for extensive tax cuts would add an estimated US$1.5 trillion to the nation’s debt over 10 years.

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