If House Republicans stick to their timeline, they are just one day away from presenting their long-awaited tax plan to the house. However, it has emerged that they are still racing with major key details before they present their plan. At the moment, they seem safe after securing a $1.5 trillion tax cut in the next 10 years. However, the key details being deliberated would see the tax cut shoot above the suggested tax cut. One of the issues that has spilled to the public is the discussion that House Republicans are still struggling to ensure that the math works. On the other hand, they can’t yet agree with how they will treat the wealthiest Americans. They are also contemplating with whether they should do away with the valuable tax deductions or whether to make them temporary. This article offers some of the insights that the party is still struggling with.
Repealing state and local tax deduction
One of the emerging issues with the new tax reform is the determination whether deductions that Americans receive at local and state level should be eliminated. The Republicans have learned that should they eliminate these deductions, they will be able to save approximately $1.3 trillion in 10 years. This is according to the information that was brought to light by the Tax Policy Center. They also determined that this would give the bill a resemblance of fiscal responsibility. The repeal experts argue that Republicans are quite happy with doing away with these deductions as they are known to favor wealthy Democrats in Democratic- rich states that are characterized by high local taxes. However, there is a concern for some Republicans who hail from regions where there is an upper middle class that heavily relies on the deduction. Some party leaders such as Republican Kevin Brady of Texas are trying to explain the issue to these Republicans.
Increasing the rich income taxes
The six lead negotiators for the Republican Party suggested raising income tax for the rich so that the tax break mathematics could balance. The negotiators suggested a tax bracket of 35 percent. This would see a decrease from the usual 39. 6 percent. However, there are some discussions within the party whether the deduction should be maintained at 39.6 percent or create another bracket for the rich people who include millionaires. The House Republicans are also thinking about making some cuts slowly. They have also floated the suggestions of making these cuts gradually.