World Economy

Trump Tax Reform Plan Enters Rugged Terrain

House Republicans in charge of tax reform face a hellish  few days before they finally release their bill on Wednesday.
House Republicans in charge of tax reform face a hellish  few days before they finally release their bill on Wednesday.

Different interest groups gave US President Donald Trump’s proposal of a tax overhaul a growing opposition on Sunday, while Republicans were paving ways to unveil a legislation that could lead to the elimination of some popular tax breaks to help in the payment of lower taxes.

The National Association of Home Builders, an influential housing industry trade group, has indicated that it will oppose the bill, which will not be unveiled until Wednesday. It has vowed to defeat the said bill over a change that could impact the use of home mortgage deductions, FSM News reported.

Meanwhile, the Republicans, who control the US House of Representatives, are trying to veer off the opposition to possible changes aimed at individual retirement savings and state and local tax payments.

The vow of tax reformation, which was proposed by Trump and Republicans, comes first since 1986. The plan is to deliver up to $6 trillion worth of tax cuts for businesses and individuals.

Republicans from the house and the senate are hurrying the approval of separate tax bills, aiming to finish them before the US Thanksgiving holiday on November 23. They are reserving December for the ironing out of differences, and January for the sending of a final version to the president’s desk.

If all goes according to plan, this will be the president’s first major legislative victory. However, analysts agree that the tax overhaul will likely be delayed until next year.

The NAHB boasts 130,000 member firms, which collectively employ around nine million workers. The association claims that the bill will negatively affect US home prices by marginalizing the value of mortgage interest deductions as an incentive for purchasing or owning houses.

“We’re opposed to the tax bill without the tax credit in there, and we’ll be working very aggressively to see it defeated,” said Jerry Howard, NAHB chief executive officer.

The association demands a tax credit equivalent to 12% of mortgage interest and property tax payments, although it says it was turned down by House Republican leaders.

  Challenges Increase

One of the biggest challenges involves a proposal to eliminate the federal deduction for state and local taxes, which analysts say would hit upper middle-class families in high income tax states such as New York, New Jersey and California. The states are home to enough house Republicans to stymie legislation.

“I‘m not going to sign onto anything until the full package is fully analyzed by economists,” representative Peter King of New York told the Fox News program Sunday Morning Futures.

A slim majority of Americans (52%) oppose Trump’s recent tax reform proposals, according to a new CNN poll conducted by SSRS, while only one-third (34%) say they support the Trump plan, CNN reported. House Republicans in charge of tax reform face a hellish few days before they finally release their bill on Wednesday.

Support is split largely along party lines: eight-in-10 Democrats (81%) say they oppose the plans, but seven-in-10 Republicans (70%) say they support them. Independents break against the proposals: 50% opposed to 35% in favor. About 14% say they don’t have an opinion.

Indeed, half of Americans disapprove of the way Trump is handling taxes, the highest level in CNN polling so far, while only 36% say they approve of his job performance on taxes. This is similar to a 34% approve to 47% disapprove split on the issue in September.

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