Senate bill to unwrap with tax cuts, end to local deduction

WASHINGTON (AP) — The Senate version of the Republicans’ high-stakes tax overhaul is set to be unveiled with billions in tax cuts for people and corporations, repeal of the federal deduction for state and local taxes, and a likely compression of the personal income tax brackets from seven to four.

The House measure, meanwhile, nears approval by the tax-writing committee after last-minute changes by its primary author.

The legislation pulling the attention of lawmakers in both chambers would bring the first major reshaping of the U.S. tax code in three decades. Underscoring the political imperative for the Republicans and President Donald Trump, top administration officials met privately with GOP senators Wednesday as Senate tax writers put finishing touches on their bill.

Senate Finance Committee Chairman Orrin Hatch, R-Utah, planned to take the wraps off the new Senate bill on Thursday. A day before, some of its most basic contours were set while others appeared in flux.

In the House, Ways and Means Committee Chair Rep. Kevin Brady was making last-minute changes before the panel votes Thursday to deliver it to the full House. Brady’s changes presumably are being made to meet the $1.5 trillion maximum that the bill is allowed to add to the $20 trillion deficit. A preliminary estimate by Congress’ nonpartisan Joint Committee on Taxation said the House measure as currently written would add $74 billion more to 10-year deficits than allowed.

The House’s tax-writing committee has begun work on the Republicans’ overhaul plan, with the panel’s chairman calling it a “monumental challenge.” Texas Rep. Kevin Brady gaveled in the session on Monday. (Nov. 6)

With his revisions, Brady, R-Texas, also likely is looking to nail down Republican votes so the House can approve the legislation soon. Democrats are expected to uniformly oppose it.

Brady wouldn’t give any hint Wednesday of what might be coming, and committee Democrats could only speculate. “Substantial change is coming in their proposal,” Rep. Richard Neal of Massachusetts, the panel’s senior Democrat, told reporters.