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Home Builders Group Pulls Support for GOP Tax Plan

Home Builders Group Pulls Support for GOP Tax Plan

Monday, 30 October 2017 03:16 PM

Another deep crack opened in the support for President Donald Trump and the Republicans' tax-cutting plan on Monday, as a powerful lobbying group in the housing industry withdrew its blessing for the GOP's top legislative priority just as its details are set to be revealed.

The move by the National Association of Home Builders adds to breakaway threats against the legislation from House Republicans from high-tax states and with strong conservative views, and from defenders of 401(k) retirement savings plans.

The building opposition to the sweeping tax overhaul plan comes as House Republicans work behind closed doors on proposed legislation for the plan that they'll unveil this Wednesday.

House Speaker Paul Ryan reacted to the homebuilders' action by accusing special interests in Washington of trying to derail the tax plan by sowing "confusion and chaos."

"Confusion and chaos is what protects the special interests" and the status quo, Ryan said at an appearance with small business leaders at Royal Basket Trucks in Darien, Wisconsin.

Ryan said he's been warning Republican lawmakers that opposition to the plan will only intensify as details are released.

Still, he didn't rule out the possibility that the homebuilders' view may still be considered as the complex legislation is drafted.

"I think the homebuilders had a very interesting proposal. It's a fairly new proposal. I think our members should take a look at all these options as we go through tax reform," Ryan said. "Maybe our members will take a liking to it."

Noting that the GOP plan calls for doubling the standard deduction used by most average Americans to $12,000 for individuals and $24,000 for families, and increasing the per-child tax credit, Ryan said earlier in a radio interview in Wisconsin, "Those things are huge middle-class tax cuts."

The nearly $6 trillion tax plan also seeks to slash the corporate tax rate from 36 percent to 20 percent and repeal inheritance taxes on multimillion-dollar estates, a huge break for the wealthy. The number of tax brackets would shrink from seven to three or four, with respective tax rates of 12 percent, 25 percent, 35 percent and to be determined.

It remains to be seen whether the middle class will see a significant tax break as details are still being finalized.

The Republicans are driven to enact the first major tax overhaul in some 30 years to show a legislative accomplishment to voters in next year's elections and keep their majority in Congress. They were stung by their failure this year to replace President Barack Obama's signature health care law.

As with that failed legislative effort, though, Republican leaders are writing the critical tax legislation in secret with Democratic lawmakers excluded and no hearings planned before formal drafting begins.

The homebuilders' group objects to the removal from the tax plan's latest version of a homeownership tax credit.

"Lawmakers missed a golden opportunity to give the American people a tax reform package that would boost middle-class families and promote greater housing opportunity for Americans across the economic spectrum," NAHB Chairman Granger MacDonald said in a statement.

The move marks a flip-flop-flip for the homebuilders' group, which originally opposed the Republican tax plan then split from other housing industry groups to support it. NAHB officials said the proposed doubling of the standard deduction meant the plan had already eroded the value of the mortgage interest deduction — a darling of the industry — because people wouldn't be likely to itemize deductions given the bigger standard break.

As a result, the group was open to other options, especially the homeownership tax credit that was previously in the plan. It would have allowed a 12 percent credit to be claimed against interest paid on up to $500,000 in mortgage debt and up to $5,500 in property taxes paid.

At the same time, Republican lawmakers from high-tax states have rebelled against the plan's proposed elimination of the federal deduction for state and local taxes. They mustered a show of force on Thursday that nearly sank the plan in a vote on the budget that cleared the way for the tax overhaul.

A battle over contributions to 401(k) retirement accounts has broken open. The financial industry and some Republican lawmakers insist that the plan not change the tax benefits of the popular savings vehicles, as has been floated by GOP leaders. Trump has given conflicting signals, promising the retirement plans' structure won't be touched, but then saying changes may be on the table.

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Another deep crack opened in the support for President Donald Trump and the Republicans' tax-cutting plan on Monday, as a powerful lobbying group in the housing industry withdrew its blessing for the GOP's top legislative priority.
home, builders, group, support, gop, tax, plan
Monday, 30 October 2017 03:16 PM
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