Trump tax overhaul under intensifying fire as Congress readies bill
By David Morgan •U.S. President Donald Trump arrives to speak about tax reform in Harrisburg, Pennsylvania, U.S., October 11, 2017. REUTERS/Joshua RobertsBy David Morgan WASHINGTON (Reuters) – President Donald Trump’s plan for overhauling the U.S. tax system faced growing opposition from interest groups on Sunday, as Republicans prepare to unveil sweeping legislation that could eliminate some of the most popular tax breaks to help pay for lower taxes.Related SearchesTax Reform BillRepublican Tax PlanTrump Tax ReformTrump Tax Plan BracketsTax Bill Passed Today Republicans who control the U.S. House of Representatives will not reveal their bill until Wednesday. But the National Association of Home Builders, a powerful housing industry trade group, is already vowing to defeat it over a change for home mortgage deductions, while Republican leaders try to head off opposition to possible changes to individual retirement savings and state and local tax payments.Trump and Republicans have vowed to enact tax reform this year for the first time since 1986. But the plan to deliver up to $6 trillion in tax cuts for businesses and individuals faces challenges even from rank-and-file House Republicans.House and Senate Republicans are on a fast-track to pass separate tax bills before the Nov. 23 U.S. Thanksgiving holiday, iron out differences in December, send a final version to Trump’s desk before January and ultimately hand the president his first major legislative victory. Analysts say there is a good chance the tax overhaul will be delayed until next year.The NAHB, which boasts 130,000 member firms employing 9 million workers, says the bill would harm U.S. home prices by marginalizing the value of mortgage interest deductions as an incentive for buying homes. The trade group wants legislation to offer a $5,500 tax credit but says it was rebuffed by House Republican leaders.”We’re opposed to the tax bill without the tax credit in there, and we’ll be working very aggressively to see it defeated,” NAHB chief executive Jerry Howard told Reuters.Republicans warned that the Trump tax plan is entering a new and difficult phase as lobbyists ramp up pressure on lawmakers to spare their pet tax breaks.”When groups start rallying against things and they succeed, everything starts unraveling,” Senator Bob Corker, a leading Republican fiscal hawk, told CBS’ Face the Nation.ANXIETY IN HIGH-TAX STATES One of the biggest challenges involves a proposal to eliminate the federal deduction for state and local taxes (SALT), which analysts say would hit upper middle-class families in high income tax states such as New York, New Jersey and California. The states are home to enough House Republicans to stymie legislation.The top House Republican on tax policy gave ground over the weekend, saying he would allow a deduction for some local taxes to remain.”We are restoring an itemized property tax deduction to help taxpayers with local tax burdens,” House Ways and Means Committee Chairman Kevin Brady said in a statement. But the gesture appeared to do little to turn the tide of opposition to SALT’s elimination.”I’m not going to sign onto anything until the full package is fully analyzed by economists,” Representative Peter King of New York told the Fox News program Sunday Morning Futures.”The fact that we’re getting it at the eleventh hour raises real issues with me,” he added.A lobby coalition representing state and local governments, realtors and public unions rejected Brady’s statement outright, saying the move would „unfairly penalize taxpayers in states that rely significantly on income taxes.”House Republicans have also faced opposition from Trump and others after proposing to sharply curtail tax-free contributions to 401(k) programs and move retirement savings to a style of account that allows tax-free withdrawals, rather than the tax-exempt contributions that are popular with 401(k) investors.House Republicans now say they could permit higher 401(k) contribution limits but continue to talk about tax-free withdrawals. „We will expand the amount that you can invest. But we’ll also give you an option to actually not be taxed later in life,” House Republican leader Kevin McCarthy told Fox News.The current cap on annual 401(k) tax-free contributions is $18,000.Corker said congressional tax committees seem to be falling short of their goal to eliminate $4 trillion in tax breaks to prevent the Trump plan from adding to the federal deficit.”They’re having great difficulty just getting to $3.6 trillion,” said the Tennessee Republican, who has vowed to vote against tax reform if it increases a federal debt load that stands at more than $20 trillion.Ohio’s Republican governor, John Kasich, told Fox News Sunday that spending on entitlement programs such as Medicare, Medicaid and Social Security should also be reviewed as part of the effort to pay for tax cuts.”It may be separate from the tax bill, but it needs to happen,” Kasich said.(Reporting by David Morgan; additional reporting by Ginger Gibson; Editing by Yara Bayoumy and Mary Milliken)
Huge rally in Barcelona rejects Catalan secession bid ELENA BECATOROS, ARITZ PARRA and JOSEPH WILSON•Nationalist activists march with Catalan, Spanish and European Union flags during a mass rally against Catalonia’s declaration of independence, in Barcelona, Spain, Sunday, Oct. 29, 2017. Thousands of opponents of independence for Catalonia held the rally on one of the city’s main avenues after one of the country’s most tumultuous days in decades. (AP Photo/Santi Palacios)BARCELONA, Spain (AP) — Hundreds of thousands of Catalans took to the streets of Barcelona on Sunday to voice their opposition to the region’s declaration of independence amid vast political uncertainty for the region in northeast Spain.Catalonia’s political leadership was fired Saturday by central authorities in Madrid who are trying to tame the worst political crisis Spain has seen in decades. So far, Catalan’s former leader has insinuated that he won’t step down.Waving Spanish, Catalan and European Union flags, the protesters described themselves as the silent majority who have been ignored during the wealthy region’s bid for independence, which came to a head Friday when the regional parliament voted to secede from Spain.”We have organized ourselves late, but we are here to show that there is a majority of Catalans that are no longer silent and that no longer want to be silenced,” said Alex Ramos, head of Catalan Civil Society, a pro-union grassroots group.The organizers said more than 1 million people turned out but police put the figure at 300,000. There was no way to immediately reconcile the figures.The mood at Sunday’s rally was festive. „We won’t let Spain be torn apart into pieces,” read one banner. „The awakening of a silenced nation,” read another.In response to the lawmakers’ secessionist vote, Spanish Prime Minister Mariano Rajoy triggered unprecedented constitutional powers, firing Catalonia’s secessionist regional government and calling an early regional election for Dec. 21.Monday will be the first working day since the region declared independence and its leadership was fired. It was not known how Catalonia’s estimated 200,000 public workers would react to their bosses’ dismissal.Ousted regional leader Carles Puigdemont has called for Catalans to engage in peaceful opposition to Spain’s takeover of regional affairs, saying he and his fired cabinet would keep „working to build a free country.”Separatist parties and grassroots groups have spoken of waging a campaign of disobedience to hamper the efforts by central authorities to run the region.Puigdemont and his ministers could face prison for their separatist actions. Spain’s government has said the ousted Catalan leaders could be charged with usurping others’ functions if they refuse to comply with their firing. Spanish prosecutors have also said they may consider rebellion charges against leading separatists.Oriol Junqueras, the ousted vice president of Catalonia’s rebellious government, wrote in an open letter Sunday saying that separatists should consider participating in the election Rajoy called for Dec. 21. Some secessionists have argued to boycott the vote.The top politicians for pro-union parties hoped to use Sunday’s rally to launch their election campaigns.”It’s time to take over the streets and take over the ballot boxes,” said Albert Rivera, the leader of the center-right Citizens party.Separatists won 48 percent of the vote in Catalonia in the 2015 regional election, although they took more seats in the regional parliament because of an election law that gives more weight to sparsely populated areas.Organizers said the rally’s goal Sunday was to defend Spain’s unity and reject „an unprecedented attack in the history of democracy.” Three weeks ago, the same group organized another mass rally that brought hundreds of thousands onto Barcelona’s streets — the largest pro-union show of force in Catalonia in recent years.”Catalan leaders have broken the law. The central government has let this situation go for too long, for even 30 or 40 years, thinking that we were never going to arrive at this extreme, but here we are,” said Angelita Cuesta, a 66-year-old retiree at the rally.”Our society is fractured, there are family members and friends who no longer can talk about politics to avoid conflict,” she added.The Catalan parliament’s vote to secede came after an Oct. 1 referendum in favor of independence that was deemed illegal by Spain’s constitutional court.There are fears the political turmoil in Catalonia could have a severe economic impact, both in the region and on Spain itself.Addressing the crowd at Sunday’s rally, Josep Borrell, former European Parliament president, said the central government’s move to take control of some regional affairs was the only thing preventing a full-blown economic crisis in Catalonia.If the government had not triggered its constitutional powers to run Catalonia, „many of you would have lost your jobs” he said. „If that hasn’t happened, it’s because … businesses and markets understand that there won’t be (secession).”Some 1,700 companies have already relocated their headquarters to other parts of Spain in recent weeks amid the political turmoil.