November Washington Update

November 7, 2017

 

Welcome to the November edition of the CEO Report, POLITICO Pro's high-level outlook on the policy issues driving the month ... and beyond.

 

TAX

Here we go: Republican tax writers are finally getting down to work on tax legislation, Pro Tax's Toby Eckert reports. The House Ways and Means Committee today kicks off a four-day markup of its bill, and the Senate is expected to release its version this week. Some of the highlights of the House bill: cutting the corporate tax rate to 20 percent from 35 percent, and lowering the tax on unincorporated businesses to 25 percent from a rate that can reach 39.6 percent. The plan would reduce the number of individual tax brackets to four from seven, retaining a top tax rate of 39.6 percent. The child tax credit, a favorite cause of Ivanka Trump, would be raised to $1,600 from $1,000. You can find more details here.

To help pay for those tax cuts, GOP tax writers would cut or end dozens of cherished tax benefits. Among the most contentious is a plan to lower the cap on how much mortgage interest homeowners can write off. Currently, they can deduct the interest on mortgages up to $1 million. The House plan would cut that in half, prompting an immediate backlash from the National Association of Homebuilders and the National Association of Realtors.

Republicans from high-tax states, meanwhile, are still smarting from a plan to cap the property tax write-off at $10,000 and eliminate the write-off for state and local income and sales taxes. Even though small businesses would get a tax cut, their powerful advocate, the National Federation of Independent Business, came out against the plan, saying rules attached to the cut would keep too many small businesses