Ryan: New Tax-Reform Plan Comes with Vast Cuts and 'Ironclad' Congressional Will
WASHINGTON -- With Speaker Paul Ryan (R-Wis.) declaring that lawmakers' will is "ironclad" to pass the first tax reforms since 1986, House Republicans unveiled their plan today.
The GOP plan would create individual tax rates of 12 percent, 25 percent and 35 percent, and maintain the 39.6 percent rate on the highest-income Americans. The standard deduction would be increased from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples; many popular "special-interest" deductions would be scrapped, though.
A new Family Credit, which expands the Child Tax Credit from $1,000 to $1,600, would include a credit of $300 for each parent and non-child dependent. The Earned Income Tax Credit and charitable deductions would be maintained. The home mortgage interest deduction would apply to newly purchased homes up to $500,000; current mortgages would not be affected. The Alternative Minimum Tax would be repealed and the Death Tax would be repealed after six years.
The corporate tax rate would drop from 35 percent to 20 percent.
House Ways and Means Chairman Kevin Brady (R-Texas) said at a press conference today that a middle-income family of four making $59,000 year would see a tax cut of nearly $1,200.
"So that Main Street business making $62,000 a year working day and night and weekends, a tax cut of over $3,000 for that Main Street business. That's your money. You earned it. You deserve to keep it," Brady said. "And you should be able to use it for whatever you want. That's exactly what this bill will do, and that's why the Tax Cut and Jobs Act has President Trump's full support."
"The focus is on middle-class tax relief," Ryan added. "The focus is on directing that tax relief to the people in the middle and the people who are trying to get there. And that is why we put our emphasis on that tax relief for those people who are in the middle, who are working paycheck to paycheck striving to get ahead."
At the White House today, Trump said he wants to have a bill on his desk by Thanksgiving.
"We're going to be having a big zero in front of a lot of people who are working very hard and they can't make ends meet," Trump said. "We're going to reduce income tax rates for individuals, increase the child tax credit, and extend it to more middle-income families -- a far larger group; repeal the alternative minimum tax; end the estate tax, or the death tax as it's commonly called; retain tax incentives for mortgages, charitable contributions, work, higher education, retirements. We have a lot things that are the important generators in our economy. Most Americans will be able to file taxes on a single sheet of paper."
The president added that "the only people that aren't going to like this is H&R Block, they're not going to be very happy."
But House Minority Leader Nancy Pelosi (D-Calif.) charged that Republicans are "raising taxes again on millions of middle-class families, hoping that the American people won't figure it out because they're going to race this through."
"If you own a home or want to one day, you lose. If you have a sick child or a family member with long-term medical care needs, they take away the medical deduction, you lose. If you have student loans or want to have student loans or use the credit for lifetime learning, that the credit for lifetime learning, you lose. If your corporation wants to pay for learning for employees, that deduction is gone. You lose. If your family is in a state, any state, and don't want your income taxed twice, you lose. And if you plan to living past 65, and need Medicare, you lose," she said.
Senate Minority Leader Chuck Schumer (D-N.Y.) said that a family in New York or Illinois or Virginia with a combined household income of about $100,000 would pay $5,727 more in taxes "while the wealthy get a huge break."
Republicans want to start marking up the bill Monday; Schumer called it "a disgrace to rush a bill like this through without a hearing."
"In short, the bill's like a fish. If it stays out in the sunlight too long, it stinks. They don't want that to happen. Our Republican friends want to avoid the spotlight," he added. "...Republicans are not proud of this bill. If they were, they'd march the bill down the streets of America with a big brass band."
Ryan told CNN that the "entire purpose" of the bill is to give all middle-class taxpayers relief.
"I'm sure that some bias groups maybe from the Left will come up with some of their own modeling but it's very clear and obvious that the whole purpose of this is the middle class tax cut, to give people more take-home pay," he said.