House Tax Panel Releases Partial Version of Trump BIll

Jason Smith Photo by Anna Moneymaker /Photographer: Anna Moneymaker/Ge

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(Bloomberg) — The House Ways and Means Committee on Friday night released a partial version of President Donald Trump’s tax proposal that calls for increasing the maximum child tax credit to $2,500 and raising the estate tax exemption to $15 million.

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“Ways and Means Republicans have spent two years preparing for this moment, and we will deliver for the American people,” Representative Jason Smith of Missouri, the committee’s chairman, said in a statement.

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The 28-page document is slated to be expanded before the committee votes on it next week. It provides a framework to achieve Trump’s campaign promise to extend his 2017 tax overhaul. 

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It was notable, however, for what it didn’t address: Raising the deduction for state and local taxes and a tax on wealthy Americans that Trump has indicated he might consider.

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For now, the text keeps the top rate at 37% rather than creating a new 39.6% rate for those individuals making more than $2.5 million, as has been discussed by Republicans behind closed doors. 

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The text, with subtitles including “Make Rural America and Main Street Grow Again” has some other expensive new tax cuts. It temporarily elevates the standard deduction by $2,000 for joint filers and $1,000 for individuals through 2028. The proposal also would increase a carveout for qualified small business income from 20% to 22% and expands the types of activities that qualify.

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Multinational companies would get an extension of current lower rates on foreign profits that they have been seeking. 

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There is no text yet on top Trump pledges to end taxes on tips, overtime and Social Security benefits as well as to give tax credits for auto loans and building domestic factories. The questions of whether to repeal green energy tax credits or the tax credit for buying electric vehicles are also not resolved. Discussed tax increases such as on carried interest and executive compensation are also absent for now. 

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Buried in the text, the bill text purports to tighten the eligibility of immigrants to receive Medicare and to create new obstacles to claiming a de minimis exemption to import tariffs.

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The question of how much to increase the SALT deduction, which was capped at $10,000 in 2017, has created a dilemma for Speaker Mike Johnson and put him in the middle of Republican lawmakers from swing districts and conservatives who insist that tax relief must to be paid for. 

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Earlier Friday, Representative Nicole Malliotakis said increasing the cap to $30,000 would reduce the tax burden of the vast majority of people in her district, which includes Staten Island and part of Brooklyn. But five other members of the GOP conference have rejected the proposal. 

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