WASHINGTON — Promoted as needed relief for the middle class, the Senate Republican tax overhaul actually would increase taxes for some 13.8 million moderate-income American households, a bipartisan analysis showed Monday.

The assessment by Congress’ nonpartisan Joint Committee on Taxation emerged as the Senate’s tax-writing committee began wading through the measure, working toward the first major revamp of the tax system in some 30 years.

Barging into the carefully calibrated work that House and Senate Republicans have done, President Donald Trump called for a steeper tax cut for wealthy Americans and pressed GOP leaders to add a contentious health care change to the already complex mix.

Trump’s latest tweet injected a dose of uncertainty into the process as the Republicans try to deliver on his top legislative priority. He commended GOP leaders for getting the tax legislation closer to passage in recent weeks and then said, “Cut top rate to 35% w/all of the rest going to middle income cuts?”

That puts him at odds with the House legislation that leaves the top rate at 39.6 percent and the Senate bill as written, with the top rate at 38.5 percent.

Trump also said, “Now how about ending the unfair & highly unpopular individual mandate in (Obama)care and reducing taxes even further?”

Overall, the legislation would deeply cut corporate taxes, double the standard deduction used by most Americans, and limit or repeal completely the federal deduction for state and local property, income and sales taxes. It carries high political stakes for Trump and Republican leaders in Congress, who view passage of tax cuts as critical to the GOP preserving its majorities at the polls next year.

With few votes to spare, Republicans leaders hope to finalize a tax overhaul by Christmas and send the legislation to Trump for his signature.

The key House leader on the effort, Rep. Kevin Brady, said he’s “very confident” that Republicans “do and will have the votes to pass” the measure this week.

Brady, chairman of the House Ways and Means Committee, said he doesn’t expect major changes to the bill as it moves to a final vote in the House. Still, he said Trump’s call for removing the requirement to have health insurance as part of the tax agreement “remains under consideration.”

Trump and the Republicans have promoted the legislation as a boon to the middle class, bringing tax relief to people with moderate incomes and boosting the economy to create new jobs.

“This bill is not a massive tax cut for the wealthy. … This is not a big giveaway to corporations,” Sen. Orrin Hatch, R-Utah, chairman of the Senate Finance Committee, insisted as the panel had its first day of debate on the Senate measure.

Hatch also downplayed the analysis by congressional tax experts showing a tax increase for several million U.S. households under the Senate proposal. Hatch said “a relatively small minority of taxpayers could see a slight increase in their taxes.”

The committee’s senior Democrat, Sen. Ron Wyden of Oregon, said the legislation has become “a massive handout to multinational corporations and a bonanza for tax cheats and powerful political donors.”

The analysis found that the Senate measure would actually increase taxes in 2019 for 13.8 million households earning less than $200,000 a year. That group, about 10 percent of all taxpayers, would face tax increases of $100 to $500 in 2019. There also would be increases greater than $500 for a number of taxpayers, especially those with incomes between $75,000 and $200,000. By 2025, 21.4 million households would have steeper tax bills.

The analysts previously found a similar magnitude of tax increases under the House bill.

A group of more than 400 millionaires and billionaires, including prominent figures such as Ben and Jerry’s founders Ben Cohen and Jerry Greenfield, designer Eileen Fisher and financier George Soros, asked Congress to reject the GOP tax plan and not give cuts to the super-wealthy like themselves.

“We urge you to oppose any legislation that further exacerbates inequality,” they said in a letter made public Monday.

Neither bill includes a repeal of the so-called individual mandate of Barack Obama’s Affordable Care Act, the requirement that Americans get health insurance or face a penalty. Several top Republicans have warned that including the provision would draw opposition and make passage tougher.

Among the biggest differences in the two bills that have emerged: the House bill allows homeowners to deduct up to $10,000 in property taxes while the Senate proposal unveiled by GOP leaders last week eliminates the entire deduction. Both versions would eliminate deductions for state and local income taxes and sales taxes.

Senate Majority Leader Mitch McConnell, R-Ky., asked whether the Senate’s proposed repeal of the property tax deduction could bring higher taxes for some middle-class Americans, acknowledged there would be some taxpayers who end up with higher tax bills.

“Any way you cut it, there is a possibility that some taxpayers would get a higher rate,” McConnell told reporters after a forum in Louisville, Kentucky, with local business owners and employees. “You can’t craft any tax bill that guarantees that every single taxpayer in America gets a tax break. What I’m telling you is the overall majority of taxpayers in every bracket would get relief.”

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Experts: GOP tax plan would hit Hawaii taxpayers hard

HONOLULU (AP) — Experts say the Republicans’ proposed changes to the federal tax code do not bode well for many Hawaii taxpayers.

Lawmakers are considering reducing or even abolishing deductions that are particularly important to Hawaii tax filers.

Proposed new limits on the mortgage deduction would affect Hawaii more than many other places because of the state’s sky-high housing costs, while limiting or eliminating the federal income tax deduction for state and local taxes would also hit local taxpayers hard, Hawaii experts say.

The Hawaii Association of Realtors is encouraging its members to lobby Congress to block or amend the tax package to protect the mortgage deduction and other provisions of the tax code that benefit Hawaii taxpayers, said Myoung Oh, government affairs director for the Hawaii Realtors.

“Right now, as far as we are concerned, there will be a lot more taxes — in some cases double taxes — for some filers” in the years ahead, Oh said. There are still many unknowns about the final tax package, “but we have the primer, and it’s definitely a sticker shock.”

The House version of the Tax Cuts and Jobs Act would end the federal tax deduction for interest paid on student loans, which would affect many college-educated workers, while the proposal to eliminate the deduction for state and local tax payments “is definitely something that will weigh heavily as well,” Oh said.

Eliminating or limiting that state and local tax deduction is a critical component of the proposed federal overhaul because it would offset some of the cost of Republicans’ other plans such as reducing corporate income taxes and exempting more people from estate taxes, the Honolulu Star-Advertiser reported .

Taxpayers who file itemized returns today are allowed to deduct taxes paid to state and local governments from their gross incomes, which reduces their federal tax liabilities.

The state and local tax deduction is especially important in states such as Hawaii with high state and local taxes. The Tax Foundation calculates that 200,000 Hawaii tax filers used the state and local tax deduction in 2015 to reduce their taxable incomes by a total of $2 billion.

That allowed Hawaii filers to reduce their federal tax burden by $343 million in 2015, said Seth Colby, tax research and planning officer with the state Department of Taxation.

For Hawaii tax filers who earn between $80,000 and $400,000, wiping out that state and local tax deduction as Senate Republicans proposed last week would almost certainly cancel out any other benefits they might enjoy from the proposed federal tax overhaul, Colby said.

WASHINGTON — Promoted as needed relief for the middle class, the Senate Republican tax overhaul actually would increase taxes for some 13.8 million moderate-income American households, a bipartisan analysis showed Monday.

The assessment by Congress’ nonpartisan Joint Committee on Taxation emerged as the Senate’s tax-writing committee began wading through the measure, working toward the first major revamp of the tax system in some 30 years.

Barging into the carefully calibrated work that House and Senate Republicans have done, President Donald Trump called for a steeper tax cut for wealthy Americans and pressed GOP leaders to add a contentious health care change to the already complex mix.

Trump’s latest tweet injected a dose of uncertainty into the process as the Republicans try to deliver on his top legislative priority. He commended GOP leaders for getting the tax legislation closer to passage in recent weeks and then said, “Cut top rate to 35% w/all of the rest going to middle income cuts?”

That puts him at odds with the House legislation that leaves the top rate at 39.6 percent and the Senate bill as written, with the top rate at 38.5 percent.

Trump also said, “Now how about ending the unfair & highly unpopular individual mandate in (Obama)care and reducing taxes even further?”

Overall, the legislation would deeply cut corporate taxes, double the standard deduction used by most Americans, and limit or repeal completely the federal deduction for state and local property, income and sales taxes. It carries high political stakes for Trump and Republican leaders in Congress, who view passage of tax cuts as critical to the GOP preserving its majorities at the polls next year.

With few votes to spare, Republicans leaders hope to finalize a tax overhaul by Christmas and send the legislation to Trump for his signature.

The key House leader on the effort, Rep. Kevin Brady, said he’s “very confident” that Republicans “do and will have the votes to pass” the measure this week.

Brady, chairman of the House Ways and Means Committee, said he doesn’t expect major changes to the bill as it moves to a final vote in the House. Still, he said Trump’s call for removing the requirement to have health insurance as part of the tax agreement “remains under consideration.”

Trump and the Republicans have promoted the legislation as a boon to the middle class, bringing tax relief to people with moderate incomes and boosting the economy to create new jobs.

“This bill is not a massive tax cut for the wealthy. … This is not a big giveaway to corporations,” Sen. Orrin Hatch, R-Utah, chairman of the Senate Finance Committee, insisted as the panel had its first day of debate on the Senate measure.

Hatch also downplayed the analysis by congressional tax experts showing a tax increase for several million U.S. households under the Senate proposal. Hatch said “a relatively small minority of taxpayers could see a slight increase in their taxes.”

The committee’s senior Democrat, Sen. Ron Wyden of Oregon, said the legislation has become “a massive handout to multinational corporations and a bonanza for tax cheats and powerful political donors.”

The analysis found that the Senate measure would actually increase taxes in 2019 for 13.8 million households earning less than $200,000 a year. That group, about 10 percent of all taxpayers, would face tax increases of $100 to $500 in 2019. There also would be increases greater than $500 for a number of taxpayers, especially those with incomes between $75,000 and $200,000. By 2025, 21.4 million households would have steeper tax bills.

The analysts previously found a similar magnitude of tax increases under the House bill.

A group of more than 400 millionaires and billionaires, including prominent figures such as Ben and Jerry’s founders Ben Cohen and Jerry Greenfield, designer Eileen Fisher and financier George Soros, asked Congress to reject the GOP tax plan and not give cuts to the super-wealthy like themselves.

“We urge you to oppose any legislation that further exacerbates inequality,” they said in a letter made public Monday.

Neither bill includes a repeal of the so-called individual mandate of Barack Obama’s Affordable Care Act, the requirement that Americans get health insurance or face a penalty. Several top Republicans have warned that including the provision would draw opposition and make passage tougher.

Among the biggest differences in the two bills that have emerged: the House bill allows homeowners to deduct up to $10,000 in property taxes while the Senate proposal unveiled by GOP leaders last week eliminates the entire deduction. Both versions would eliminate deductions for state and local income taxes and sales taxes.

Senate Majority Leader Mitch McConnell, R-Ky., asked whether the Senate’s proposed repeal of the property tax deduction could bring higher taxes for some middle-class Americans, acknowledged there would be some taxpayers who end up with higher tax bills.

“Any way you cut it, there is a possibility that some taxpayers would get a higher rate,” McConnell told reporters after a forum in Louisville, Kentucky, with local business owners and employees. “You can’t craft any tax bill that guarantees that every single taxpayer in America gets a tax break. What I’m telling you is the overall majority of taxpayers in every bracket would get relief.”

——————————————————————————————————-

Experts: GOP tax plan would hit Hawaii taxpayers hard

HONOLULU (AP) — Experts say the Republicans’ proposed changes to the federal tax code do not bode well for many Hawaii taxpayers.

Lawmakers are considering reducing or even abolishing deductions that are particularly important to Hawaii tax filers.

Proposed new limits on the mortgage deduction would affect Hawaii more than many other places because of the state’s sky-high housing costs, while limiting or eliminating the federal income tax deduction for state and local taxes would also hit local taxpayers hard, Hawaii experts say.

The Hawaii Association of Realtors is encouraging its members to lobby Congress to block or amend the tax package to protect the mortgage deduction and other provisions of the tax code that benefit Hawaii taxpayers, said Myoung Oh, government affairs director for the Hawaii Realtors.

“Right now, as far as we are concerned, there will be a lot more taxes — in some cases double taxes — for some filers” in the years ahead, Oh said. There are still many unknowns about the final tax package, “but we have the primer, and it’s definitely a sticker shock.”

The House version of the Tax Cuts and Jobs Act would end the federal tax deduction for interest paid on student loans, which would affect many college-educated workers, while the proposal to eliminate the deduction for state and local tax payments “is definitely something that will weigh heavily as well,” Oh said.

Eliminating or limiting that state and local tax deduction is a critical component of the proposed federal overhaul because it would offset some of the cost of Republicans’ other plans such as reducing corporate income taxes and exempting more people from estate taxes, the Honolulu Star-Advertiser reported .

Taxpayers who file itemized returns today are allowed to deduct taxes paid to state and local governments from their gross incomes, which reduces their federal tax liabilities.

The state and local tax deduction is especially important in states such as Hawaii with high state and local taxes. The Tax Foundation calculates that 200,000 Hawaii tax filers used the state and local tax deduction in 2015 to reduce their taxable incomes by a total of $2 billion.

That allowed Hawaii filers to reduce their federal tax burden by $343 million in 2015, said Seth Colby, tax research and planning officer with the state Department of Taxation.

For Hawaii tax filers who earn between $80,000 and $400,000, wiping out that state and local tax deduction as Senate Republicans proposed last week would almost certainly cancel out any other benefits they might enjoy from the proposed federal tax overhaul, Colby said.