The House of Representatives on Thursday passed the fiscal year 2018 budget resolution that had earlier cleared the U.S. Senate, setting the stage for the Republicans to write a tax reform bill. Repealing the tax break would generate an estimated $1.3 trillion over 10 years.
Sen. Lindsey Graham laid out a bleak future for Republicans in Congress if the party doesn't pass a tax code overhaul.
Some lawmakers from states where state and local taxes are high and people benefit most from the federal income tax deduction are reluctant to contemplate such an elimination.
Republicans view passage of the tax measure as a career-defining dream, and its importance has only grown in the wake of the party's debacle on health care.
As Republicans constantly must remember: Good policy is good politics. A 2013 analysis by the Congressional Budget Office found that two-thirds of the tax benefits went to the top 20% of earners.
The underlying budget measure abandons the Republican Party's longstanding promise to rein in deficits in favor of Trump's boast of "massive tax cuts". "Republicans control the House, Senate and the White House - we should be passing a budget that reforms mandatory spending and balances over time", Jenkins said in a statement. "We don't have a choice". The proposal would reduce the number of income tax brackets from seven to three, cut the corporate tax rate and eliminate the estate tax. This, given the constraints of the just-passed budget, must be done without increasing the deficit by more than $1.5 trillion over the next decade. No Democrats voted for the measure.
NY and California's Democratic governors said on Friday residents would face hefty tax increases and some would leave their states under a proposal in the Republican tax plan that would eliminate state and local tax (SALT) deductions on federal income tax.
The goal is a full rewrite of the inefficient, loophole-laden tax code in hopes of lower rates for corporations and other businesses and a burst of economic growth. Financial advisors have voiced concern that lowering pre-tax contribution limits could worsen US workers' retirement shortfall.
In sidestepping the question, he avoided aligning with Trump, who this week called for making no changes to workers' 401 (k) contributions. "By passing this budget, I am pleased we can begin the process of advancing tax reform and ultimately get legislation to the president's desk for his signature".
Brady was expected to introduce tax overhaul legislation next week, as Trump has long promised. "They've got a revenue problem, a real revenue problem".
Retirement savings are major problem in the USA both economically-because so few Americans are saving enough for their futures-and politically-because the people who do take advantage of saving incentives boast higher incomes and commensurately louder political voices.
Congressman Kevin Brady, R-Texas, chairman of the tax-writing Ways and Means Committee, is one of the main proponents of changing the 401 (k) rules, a major disagreement with President Trump, who tweeted Monday that 401 (k) s are a "great and popular middle class tax break" that he does not want to change.
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