WOODRUFF: Republicans in the House of Representatives released their plan for overhauling the U.S.
tax code today, the most sweeping proposal of its kind in more than three decades.
It was embraced quickly by President Trump and lawmakers say they aim to pass it before
the end of the year.
But the bill would bring about big changes, many of which will be the subject of big political
fights.
Lisa Desjardins reports from Capitol Hill.
(BEGIN VIDEOTAPE)
RYAN: Good morning!
LISA DESJARDINS, PBS NEWSHOUR CORRESPONDENT (voice-over): The speaker of the House --
RYAN: Good morning!
DESJARDINS: -- serving as cheerleader in chief.
Paul Ryan and House Republicans unveiled a sweeping plan to affect nearly every American's
taxes and simplify them, they say, down to a postcard-sized form.
RYAN: With this plan we are making pro-growth reforms so that yes, America can compete with
the rest of the world.
But we are also making it so that families like these that are here can have more take
home pay.
DESJARDINS: The 400-page bill is dense.
It would reduce most individual income tax rates, and permanently cut the corporate tax
rate from 35 percent to 20 percent.
The alternative minimum tax for wealthier Americans would end, but so would a slew of
tax breaks, including a deduction for most state and local taxes.
That could hit the wallets of high-tax states and cities, like New York and New Jersey.
To help offset that blow, the GOP bill would still allow deduction of property taxes.
Democrat and House Minority Leader Nancy Pelosi slammed the proposal.
REP.
NANCY PELOSI (D-CA), MINORITY LEADER: Republicans have unveiled a bill that raises taxes on
millions of middle class families and borrows trillions from the future just to give massive
new tax breaks to the wealthy and especially to their friends, corporate America.
DESJARDINS: So, what does the bill mean for individuals?
Republicans would double the standard deduction for each taxpayer to $12,000.
Next, the House GOP would collapse the seven current tax rates to just four tax rates from
12 percent to nearly 40 percent.
So, who would pay what?
Looking at married couples, filing jointly.
Those earning under $24,000 would pay no taxes due to the new standard deduction.
The largest two groups would be couples making up to $90,000, who would face a 12 percent
rate, and those making between $90,000 and $260,000, they would be taxed at 25 percent.
The GOP plan would keep the highest rate in the tax code, 39.6 percent, but apply that
to fewer people.
So, what's this mean?
It would be a rate decrease for everyone earning up to a million dollars.
And for millionaires, no change.
President Trump, meeting with Republicans after lunch, was enthusiastic, saying the
bill could get to him by Christmas.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: We have a great team and it's a team that
loves what they are doing, they love the American people, they love this country and they are
going to get it done.
DESJARDINS: But some other Republicans, like Arizona Senator Jeff Flake, were uncomfortable,
especially with how the tax cuts would add to the deficit.
SEN.
JEFF FLAKE (R), ARIZONA: Rate reductions have to be accompanied by real reform.
We cannot simply rely on rosy economic assumptions, rosy growth rates to fill in the gap.
We've got to make tough decisions.
DESJARDINS: Other highly debated features?
The plan would phase out the estate tax on large-scale, inherited wealth.
Republicans say that tax hits family farms.
Others say ending it is a giveaway to the rich.
And there is also a change to one of the biggest deductions of them all -- the home mortgage
deduction.
That would stay for current homeowners, but for anyone buying a new home, there would
be a $500,000 limit.
And there are dozens of smaller pieces, including like a the concerns of from some small businesses,
that mean however much Republicans want tax cuts.
Passage is not yet certain.
REP.
KEVIN MCCARTHY (R-CA), MAJORITY LEADER: For every member, this could really become the
most significant bill they ever make a decision in their term in Congress.
DESJARDINS: Significant and soon.
A full House vote is expected in the next two weeks.
At the U.S. Capitol, I'm Lisa Desjardins for the PBS NEWSHOUR.
(END VIDEOTAPE)
WOODRUFF: There are some other important changes in this bill.
It would create a minimum tax on corporate earnings overseas, but one that may be lower
for some businesses than the U.S. corporate rate here.
We'll talk with the bill's lead author after the news summary.