Republican leaders in Congress are moving forward with tax reform, releasing a framework of a proposal in the next two weeks. At the same time, President Trump has been holding meetings with Democrats about how to tackle the issue, open to a more bipartisan approach to the legislation.
It begins with the outline that will be released the 25th and then the tax writing committees are going to take feedback and input and then they are going to go produce their bills in the weeks ahead.
Tax negotiations have been going on for months between Ryan, Senate Majority Leader Mitch McConnell, Senate Finance Committee Chair Orrin Hatch, House Ways and Means Committee Chair Kevin Brady, Treasury Secretary Steve Mnuchin and White House Economic Council Director Gary Cohn.
Those talks have progressed very slowly. But there are also signs of progress. The six negotiators, aiming to lower the tax burden on both businesses and individuals, have moved closer to an agreement on several areas for both.
The proposal is expected to include a reduction of the mortgage interest deduction by either capping it or eliminating it altogether and increasing the standard deduction in its place.
The state and local tax deduction could also be cut. It’s another popular itemized deduction that benefits people who live in big states with higher local taxes — like New York, New Jersey and
Illinois.
Another revenue raising tax that is on the table to be reduced or eliminated is the tax on interest earned from income producing investments.
The corporate tax rate could be reduced from the current level of 35 percent to between 20 and 25 percent.
While Republicans and administration officials are moving forward with their version of tax reform, Trump continues to reach out to Democrats.
Politicians across Washington see it as a pleasant surprise, especially after two failed tax proposals before.
Trump reiterated that reform would not be a tax cut for the rich. Short said – a simplified tax code would presumably eliminate the opportunity and that perhaps wealthy people will have to pay more.