GOP tax reform plan advanced by House Ways and Means Committee

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House Ways and Means Committee Chairman Kevin Brady (R-TX) (L) sets down a copy of the current tax code as he and ranking member Rep. Richard Neal (D-MA) prepare for the first markup hearing of the proposed GOP tax reform legislation in the Longworth House Office Building on Capitol Hill November 6, 2017 in Washington, DC.

Republicans still face hurdles in hitting their target of approving a tax bill this year. Some of the legislation’s provisions threaten GOP rebellion. Senate Republicans are also pushing to pass their own, separate plan, that lawmakers would have to reconcile if each chamber approved its own bill.

The House bill, called the Tax Cuts and Jobs Act, cuts the corporate tax rate from 35 percent to 20 percent, while moderately reducing household income tax rates. It changes some popular provisions such as the mortgage interest deduction, but leaves others, like the 401(k) tax benefit, unchanged.

The Senate plan largely overlaps with the House proposal, but does not repeal the estate tax and leaves the mortgage interest deduction unchanged.

The plan’s elimination of a federal tax deduction for state and local taxes has sparked the most resistance from the party. Already, Republican lawmakers in high-tax, blue states have pushed back against the provision.

The GOP has searched for ways to offset major tax cuts without alienating its members by including unpopular measures. The Joint Committee on Taxation has projected that an earlier version of the House bill will lead to $1.7 trillion more in budget deficits over 10 years.

The figure tops the $1.5 trillion in deficits allowed under budget rules the GOP is using to pass a tax bill.