GOP Tax Plan Borrows from Obama, Hits Wall Street
House Republicans are borrowing ideas from President Barack Obama for an election-year plan to overhaul the nation’s tax laws.
But here’s a reality check: The plan has almost no chance of becoming law this year, and even House Speaker John Boehner, R-Ohio, distanced himself from the details Wednesday. Still, it could become an important political document as the elections approach in November.
Investment managers, big banks and owners of corporate jets would get hit with new or higher taxes, billions would be set aside for public works projects, and some wealthy business partners no longer would benefit from a tax provision.
While those are ideas championed by Obama, who would direct the new revenue toward more government spending, Republicans would use it to lower income tax rates for most families and corporations.
The top income tax rate would drop from 39.6 percent to 25 percent, but the plan would impose a new 10 percent surtax on some earned income above about $450,000. The top corporate income tax rate would fall from 35 percent to 25 percent.
The plan would bolster the standard deduction and increase the child tax credit while trimming other deductions, exemptions and credits. As a result, 95 percent of filers would take the standard deduction rather than itemize, according to analysis by the nonpartisan Joint Committee on Taxation. Currently, about one-third of filers itemize their deductions.
Should Republicans choose to embrace the plan, they could use it to highlight their efforts to simplify tax laws and spur economic growth. Democrats surely would rely on it to point out cherished tax breaks that would be cut.
Boehner, already wary of some of the unpleasant details, would not promise a vote in the House this year. When asked about the details, Boehner said, "Blah, blah, blah, blah. Listen, there’s a conversation that needs to begin. This is the beginning of the conversation."