House won't accept repeal of local tax break, Brady says

Sergio Conner
November 13, 2017

The chairman of the House's tax-writing committee says he's confident that chamber won't go along with the Senate's proposal to eliminate the deduction for property taxes.

Cuts to the corporate tax rate (from 35 percent to 20 percent) outlined in the House bill will be delayed for one year under the Senate version, and popular middle-class tax breaks for mortgage interests and medical costs will also remain.

The new tax plan, which lowers the corporate tax rate, eliminates tax deductions and modestly lowers income tax rates, is being billed by Republicans as a stimulus for the national economy, while detractors are calling it another version of "trickle-down" economics.

The House of Representatives is "committed" to preserving some of the deductions for state and local taxes that Americans can claim on their federal taxes, House Ways and Means Committee Chair Kevin Brady (R-TX) said while speaking to Chris Wallace on Fox News Sunday.

Some taxpayers will win and some will lose in a swap of school property taxes for higher state income taxes, said Jay Brower Jr., a certified public accountant and a partner in Marks Paneth LLP in Jenkintown. Signers include Ben & Jerry's Ice Cream founders Ben Cohen and Jerry Greenfield, fashion designer Eileen Fisher, billionaire hedge fund manager George Soros and philanthropist Steven Rockefeller, as well as many individuals and couples who aren't household names but have at least $1 million in assets.

"I think a tax cut is absurd", said Bob Crandall, a former American Airlines chief executive who signed the letter.

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On personal income taxes, neither the House measure nor the Senate measure is written to favor the highest earners. Senator Kirsten Gillibrand (D-NY) has lambasted the corporate tax cuts, which would bring USA rates in line with those of other advanced economies, as "corporate welfare".

Scrapping Obamacare's so-called individual mandate would save the government $338 billion over 10 years, the Congressional Budget Office estimated this month, giving the GOP more room to chop rates.

Working-age renters could be big losers, since they would see no benefit from eliminating homeowner property taxes.

Meanwhile, on the other side of the aisle, Democrats are showing a united front on opposing the tax plan.

She laid out a scenario in which 10 reporters had a beer together every day and paid the $100 tab under a mechanism akin to the federal income tax system.

"This tax proposal would reduce private investment in affordable housing, worsen our regional housing crisis and set up massive future budget cuts", said Rachel Heller, CEO of the Citizens Housing and Planning Association in MA in a statement. King said on Fox's "Sunday Morning Futures". "We're going to simplify taxes somewhat", said Toomey. "These are hard-working people, and they're going to get screwed by this bill".

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