House Republicans unveil sweeping plan to slash tax rates

House Republicans on Thursday released their long-awaited legislation to overhaul the tax code, proposing major cuts to corporate and individual tax rates.

The 429-page bill, called the “Tax Cuts and Jobs Act,” represents the opening salvo in the GOP's fight to rewrite the tax code for the first time in more than 30 years.

"It's the beginning of the end of this horrible tax code," House Ways and Means Committee Chairman Kevin BradyKevin Patrick BradySmaller tax refunds put GOP on defensive Key author of GOP tax law joins Ernst and Young Lawmakers beat lobbyists at charity hockey game MORE (R-Texas) said.

The bill largely follows the parameters that GOP leaders and the White House outlined in September. It would reduce the number of individual tax brackets, slash rates for businesses and eliminate a number of tax breaks.

In order to offset the costs of the legislation, Republicans are putting forward some proposals that are sure to be controversial.

The bill would keep the mortgage-interest deduction, but only for interest on the first $500,000 of a newly purchased home; the cap is now set at $1 million. Homes bought in the past could keep the deduction regardless of price. The housing industry quickly blasted the changes.

The legislation would also allow taxpayers to deduct their state and local property taxes, but only up to $10,000. It would not allow people to deduct state and local income or sales taxes.

Blue-state Republicans have fought to preserve that deduction, which is important to their constituents. It’s not clear how receptive they will be to the compromise.

“I’m still analyzing it, but right now, I’m strongly leaning no,” Rep. Pete KingPeter (Pete) Thomas KingGOP lawmaker: Amazon would be moving into NY if Ocasio-Cortez wasn't elected Dems escalate gun fight a year after Parkland Assault weapons ban push tests Dem support MORE (R-N.Y.) said.

Several other controversial ideas that were floated to help pay for the bill, including limits on pre-tax contributions to 401(k) plans and a repeal of ObamaCare’s individual mandate, were not included.

Republicans are still searching for their first major legislative victory since President Trump took office, and hope that the tax overhaul will charge up the economy and help their standing with voters.

The president quickly backed the plan Thursday morning, calling it a step toward "massive tax relief for the American people." 

"The special interests will distort the facts, the lobbyists will try to save their special deals, and some in the media will unfairly report on our efforts. But my Administration will work tirelessly to make good on our promise to the working people who built our Nation and deliver historic tax cuts and reforms — the rocket fuel our economy needs to soar higher than ever before," Trump said in a statement.

The legislation collapses the current seven brackets to four, with the top tax rate staying at 39.6 percent. The other individual rates in the bill are 12 percent, 25 percent and 35 percent.

The standard deduction is nearly doubled, while the child tax credit is increased from $1,000 to $1,600. The bill also creates a $300 credit for expenses related to the care of parents and non-child dependents, and it preserves the child and dependent care credit and the earned income tax credit. 

The bill also repeals the alternative minimum tax. The amount of assets exempt from the estate tax would initially be doubled, and the tax would be repealed after six years.

The corporate tax rate would be lowered from 35 percent to 20 percent. The bill would also lower the top rate for noncorporate “pass-through” businesses from 39.6 percent to 25 percent.

The tax-writing Ways and Means Committee plans to start considering the bill on Monday, and GOP leaders are aiming for the measure to pass the House by Thanksgiving — a breakneck pace that is likely to test party unity.