White House Wants House To Pass Tax Bill By Thanksgiving

The White House on Monday laid out an "aggressive" timeline for tax reform that envisions the House passing legislation by Thanksgiving to get a package to President Trump by the end of the year.

House Republicans are slated to unveil their first draft Wednesday, with action in the Ways and Means Committee next week.

Chairman Kevin Brady was still tweaking the plan Monday, hoping to avoid alienating important allies. To partially offset some of the bill's up-front costs, lawmakers were weighing a proposal that would gradually phase in a lowering of the corporate tax rate from 35 percent to 20 percent, Bloomberg reported Monday.

Stocks plummeted after the report broke, and the White House said Mr. Trump wasn't interested in that approach anyway.

"The president laid out his principles and it doesn't include the phasing in, so we're still committed to that moving forward," said White House press secretary Sarah Huckabee Sanders. She said the "aggressive timeline" is key to getting tax cuts for families and businesses in place for 2018.

Grover Norquist, president of Americans for Tax Reform, said on Fox Business Network that such a phase-in would be a "disaster" both politically and economically, since it would delay positive economic effects voters would feel.

"A delay is foolish. I don't think they'll do it," said Mr. Norquist, who has been in frequent contact with the White House amid the tax reform negotiations.

In addition to lowering the corporate rate, the Republican framework calls for lowering individual tax rates, to be paid for by ridding the code of special breaks and exemptions and increased revenues from economic growth the plan is projected to generate.

But Mr. Brady and his allies have struggle to identify tax breaks they can eliminate without angering groups whose support they want.

In recent days he signaled he's backing off plans to completely repeal the deduction for state and local taxes paid, a move that could have generated between $1 trillion and $2 trillion over 10 years, freeing up money to plow into lowering tax rates overall.

At the urging of lawmakers, the Republican plan will keep in place a deduction for local property taxes "to help taxpayers with local tax burdens," Mr. Brady said.

That's a nod to blue-state Republicans who have lobbied to preserve the break in its entirety.

Rep. Leonard Lance, New Jersey Republican, said the change is a step in the right direction but that he wants to see the legislative text to determine if the package is in the best interest of his state.

"There is more work to be done on the SALT issue," Mr. Lance said in a statement to The Washington Times.

Mr. Lance was one of 20 Republican House members who last week voted against the 2018 Senate budget plan, which includes fast-track language that allows the GOP to pass the tax bill with a simple majority in the House and Senate, bypassing the need for any Democratic support.

While caving on state and local taxes, Mr. Brady has apparently hung tough on refusing to create a new homeownership tax credit.

That has cost the GOP the support of the National Association of Home Builders, which announced it would have to oppose the plan.

Housing and realtors' groups have argued that a planned increase in the standard deduction would decrease the use of the mortgage interest deduction, since fewer people would itemize their taxes and more would simply take the increased standard one.

"By sharply reducing the number of taxpayers who would itemize, what's left is a tax bill that essentially eviscerates the mortgage interest deduction and strips the tax code of its most vital homeownership tax benefit," said NAHB Chairman Granger MacDonald.

Mr. Brady said he'd been trying to work out a new tax credit to promote homeownership that would accommodate the housing industry's needs. He held out hope they could strike a deal later in the legislative process.

"I hope members of Congress will examine it closely to determine if they want it included before tax reform heads to the president's desk," said Mr. Brady, Texas Republican.

In addition to policy concerns, another wild card is how much attention on Capitol Hill will be diverted away from taxes in the coming days and weeks, after the first charges in Special Counsel Robert Mueller's Russia probe were unveiled Monday.

But House Speaker Paul D. Ryan on Monday said the Russia issue isn't going to stop Republicans from passing their long-sought tax overhaul.

"I really don't have anything to add, other than nothing's going to derail what we're doing in Congress because we're working on solving people's problems," Mr. Ryan told WTAQ radio. "I feel very good where we are."