(photo credit: JPOST STAFF)
WASHINGTON - Republicans plan to put a bill to overhaul the US tax system to a vote in the House of Representatives next week, a senior lawmaker said on Tuesday as a top ratings agency predicted the tax cuts would clear Congress but balloon the federal deficit.
Facing pockets of discontent in their own ranks, Republican tax negotiators in the House are seeking to resolve differences over the legislation this week and stick to a self-imposed deadline of passage this month.
"We'll bring it to the floor next week," House Ways and Means Committee Chairman Kevin Brady told Fox News. "Our goal is to pass it next week out of the House."
The tax plan, if it gets through the Republican-controlled House, would likely face a more serious challenge in the Senate, where the party only has a majority of 52-48 votes and may need help from Democrats.
If enacted, the tax plan would be the biggest restructuring of the US tax code since the 1980s and the first major legislative victory of Donald Trump's presidency.
Fitch Ratings predicted on Tuesday that some sort of Republican tax plan would get through both chambers of Congress, but it would give only a short-lived boost to the US economy and add significantly to the federal debt burden.
"Such reform would deliver a modest and temporary spur to growth, already reflected in growth forecasts of 2.5 percent for 2018. However, it will lead to wider fiscal deficits and add significantly to US government debt," Fitch said, revising its medium-term debt forecast higher.
It said the United States' debt-to-GDP ratio would rise substantially to 120 percent by 2027.
Republicans are proposing a range of tax cuts, including slashing the corporate rate to 20 percent from 35 percent, establishing a new 25-percent rate for "pass through" businesses, and creating new tax brackets for individuals and families.
Trump and his Republican allies in Congress argue the tax cuts are needed to boost economic growth and create jobs.
Democrats have condemned the plan as a giveaway to the rich and say that many middle-class Americans will be hurt by the elimination of popular tax deductions, such as the one for state and local income tax payments.
Thomas Barthold, head of the nonpartisan Joint Committee on Taxation, which assists congressional tax writers, testified on Capitol Hill on Monday that the proposed tax bill could result in higher tax bills beginning in 2023 for as many as 38 million people who make between $20,000 and $40,000 per year.
Republican leaders have pushed for the House to vote on the tax bill before the US Thanksgiving holiday on Nov. 23 and the party's lawmakers are revising the proposal this week.