Tax Reform Gains Momentum After House Passes Budget


"This tax reform is our agenda, it's the Republican Senate agenda", Corker said in a "Squawk Box" interview.

But Trump vehemently resisted this change, tweeting Monday that there would be "NO change to your 401 (k)".

"We want to increase the amount that you can give to your 401 (k) or IRA up to $20,000 or more and we want to create incentives", Brady said.

David Stockman, a former budget director for President Ronald Reagan, said the Trump plan "can't possibly get done by year-end", describing that as an unrealistic and "amateur" view. The House GOP is expected to unveil text of its bill next week, and members warn that there will be a dozen more changes to the tax code that will upset members and various constituencies. After that point, savers would be forced to add money to Roth-style plans, which are taxed up front.

Meanwhile, Trump appeared to soften his position, saying that 401 (k) changes are still on the table "and maybe we'll use it as negotiating". And I'm all in for locking arms and having the intestinal fortitude to do it.

With Republican leaders battling to show themselves as true standard bearers for the middle class, eyeing next year's midterm elections that are deemed essential to retaining their majority, the 401 (k) issue has become a flashpoint.

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The deduction for state and local taxes is still a major point of contention: Eleven of the Republicans voting against the budget represent NY and New Jersey, high-tax states where residents would likely be hurt by the proposed elimination of the tax write-off. Then on Wednesday, he suggested the idea was up for negotiation. "Property taxes just are painful, whether it's young families or seniors who have paid off their mortgage".

Additionally, Rep. Tom Reed (R-N.Y.) has suggested converting the SALT deduction to a tax credit. "I think that's how a lot of guys are approaching it".

Another senior member of the Senate Finance Committee, Sen.

The lawmakers insist the elimination of the federal deduction for state and local taxes would hurt many of their constituents and subject them to being taxed twice.

The razor-thin 216-212 vote in the House for the budget allows Republicans to begin work on a follow-up $1.5 trillion tax cut and move it through Congress without fear of blocking tactics by Democrats.

Blue-state Republicans will be divided on their votes on the budget, and have varying degrees of openness to a compromise on SALT. But Rep. Leonard Lance (R-N.J.) voted no on the House's budget measure several weeks ago and said Wednesday that he will vote against the Senate's resolution. He said Reagan's 1986 tax overhaul, which Republicans cite as a guiding light for their current efforts, took two years because cobbling together the support for raising revenue to pay for tax cuts is "very hard politically".