WASHINGTON (AP) — 3:20 p.m.
President Donald Trump is planting a kiss on a symbol of the House Republican tax plan.
In a White House meeting with House Republican leaders and Republican members of the tax-writing Ways and Means Committee, the president had an enthusiastic response when he was shown two postcard-sized papers that some taxpayers would be able to use to file their taxes.
The president said, "great job!" and added that he didn't know he was going to be given a prop. To show his approval, Trump kissed one of the postcards before giving it back to Ways and Means Chairman Kevin Brady.
Trump is trying to build momentum for the plan ahead of his trip to Asia. He says the bill is about tax cuts, tax reform and "it's all about jobs."
President Donald Trump is cheering the Republican Party's plan to cut the corporate tax rate and efforts to simplify the tax code, and predicts it will earn Democratic votes.
Attending an event with House Speaker Paul Ryan and other lawmakers, Trump says: "This is a middle income tax reduction."
Trump says many people will be able to file their taxes on a postcard should the plan become law.
Praising the drafters of the GOP tax plan released Thursday, Trump says he'll be counting on the "great team" to keep up the momentum on tax reform as he embarks on a 12-day trip to Asia Friday.
Trump says he hopes to have the tax reform package signed into law by the end of the year.
Churches would gain the right to endorse political candidates and still retain their tax-free status under a provision in the House GOP's tax overhaul plan.
The bill would repeal a 63-year-old law credited to former President Lyndon Johnson back when he served in the Senate.
Critics warn it could open a loophole that could funnel tax-free money into campaigns. The provision would cost $2 billion over the coming decade, according to congressional scorekeepers.
The Johnson amendment law prohibits tax-exempt charitable organizations such as churches from participating directly or indirectly in any political campaign to support or oppose a candidate. If the IRS determines that a group has violated the law, it can revoke its tax-exempt status.
The GOP plan permits political activity by churches so long as there is a minimal cost.
President Donald Trump is calling the tax bill released Thursday by Congressional Republicans "a great bill," expressing optimism that it will be passed into law by the end of the year.
Trump says his administration is "working to give the American people a giant tax cut for Christmas." Calling tax cuts "a big, beautiful Christmas present." Says Trump: "It will be the biggest cut in the history of our country. It will also be tax reform, and it will create jobs."
Trump adds that the Republican proposal, which would slash corporate rates and simplify the personal tax code, has been "met with really a great response."
The House's top Democrat and her colleagues from California are using the GOP's tax cut plan to criticize the 14 Republicans from the state who serve in Congress.
The GOP plan released Thursday limits the deductibility of local property taxes to $10,000, while eliminating the deduction for state income taxes.
Minority Leader Nancy Pelosi says millions of Californians rely on the tax deduction, and limiting it will undermine the financial stability of middle-class families in California.
One by one, Democratic members cited a Republican lawmaker from the state and how many people in their district use the deduction at a Capitol Hill news conference.
Pelosi says "every single California Republican voted for a budget resolution that made it possible for this harm to come to our state, and we want their constituents to know about it."
The top lobby for small businesses says it opposes the newly-released GOP tax plan — at least in its current form. That's a big blow to Republicans hoping to quickly pass the measure into law.
The National Federation of Independent Business, a powerful GOP-leaning trade association, says the bill "leaves too many small businesses behind."
It says too many small businesses currently taxed at individual rates of up to 39.6 percent won't be able to take advantage of a new 25 percent top tax rate. The GOP measure released on Thursday contains safeguards aimed at making sure the new business tax rate isn't a huge loophole for high-income wage earners such as lawyers.
The NFIB said that "tax reform should provide substantial relief to all small businesses."
President Donald Trump has congratulated House Republican leaders for introducing legislation to overhaul the tax code.
But Trump cautions that Thursday's unveiling marks the beginning of the legislative process and that there is "much work left to do." The president says special interest groups will distort the facts, lobbyists will try to save their "special deals" and the news media will "unfairly report on our efforts."
He is pledging a tireless effort by the administration to deliver on his promise to cut taxes for working people.
Trump says tax cuts are the "rocket fuel our economy needs to soar higher than ever before."
The legislation would slash corporate tax rates and lower taxes for most Americans. It would also limit a cherished deduction for homeowners, among other proposed changes.
House Republicans on Thursday unveiled a tax cut plan that slashes the corporate tax rate, lowers taxes for most Americans but limits a cherished deduction for homeowners as President Donald Trump and the GOP seek to deliver on the first tax revamp in three decades.
The proposal would add $1.5 trillion to the nation's debt over the next decade as Republicans largely abandoned fiscal discipline in a desire to secure a legislative achievement for Trump and score a political win ahead of next year's midterm elections.
Middle-income families would pay less, thanks to doubling of the standard deduction and an increase in the child tax credit. Wealthy Americans, like Trump, would benefit from the repeal of the alternative minimum tax and phase out of the estate tax.
Some two-income, upper middle class families would pay more after being bumped into a higher tax bracket and losing a valuable deduction on state income taxes.
GOP leaders briefed rank-and-file lawmakers on the proposal Thursday morning ahead of a show-of-unity event at the White House with Trump.
"Today is the day. We are introducing legislation that will cut your taxes & make the entire system more simple. This will be a game-changer," Speaker Paul Ryan, R-Wis., said on Twitter.
The proposal would leave intact the existing rules on 401(k) retirement accounts and the ability of Americans to contribute up to $18,000 into the accounts tax-free. But the plan limits the widely used deduction for mortgage interest for new home loans of $500,000 or less, a sharp reduction from the current $1 million cap.
The plan also limits the deductibility of local property taxes to $10,000 while eliminating the deduction for state income taxes, which has generated significant opposition from Republicans in high-tax states such as New York and New Jersey.
The tax-writing Ways and Means Committee will work on finalizing the proposal next week, and the GOP's ambitious timetable to get a bill to Trump by Christmas faces numerous roadblocks. The proposal caused anxiety for some House Republicans and drew criticism from a few in the Senate, which is intent on writing its own bill.
Rep. Dan Donovan, R-N.Y., said he still had concerns about the state and local tax deduction, and planned to meet with leadership.
"We're going to look at all of this to see how it all plays out," he told reporters as he emerged from the GOP caucus.
The plan shrinks the number of tax brackets from seven to three or four, with respective tax rates of 12 percent, 25 percent, 35 percent and a category still to be determined. The tax system would be simplified, and most people would be able to file their returns on a postcard-sized form.
The plan sets a 25 percent tax rate starting at $90,000 for married couples, with a 35 percent rate beginning to bite at $260,000 — which means many upper-income families whose top rate is 33 percent would face higher taxes. Individuals making $500,000 and couples earning $1 million would face the current Clinton-era top rate of 39.6 percent.
The plan slashes the corporate tax rate from 35 percent to 20 percent, a demand of Trump. It also repeals the inheritance taxes on multimillion-dollar estates, a big break for the wealthy.
"There are a lot of people still in our conference who are anxious to see exactly how this plays out with growth in the economy, what the long term deficit and debt situation turns out to be," said Rep. Steve Womack, R-Ark.
The child tax credit would be increased from $1,000 to $1,600, though the $4,050 per child exemption would be repealed.
Sen. Marco Rubio, R-Fla., tweeted: "House #TaxReform plan is only starting point. But $600 #ChildTaxCredit increase doesn't achieve our & @potus goal of helping working families."
The legislation is a longstanding goal for Capitol Hill Republicans who see a once-in-a-generation opportunity to clean up an inefficient, loophole-cluttered tax code.
The plan calls for nearly 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. On net, it could mean tax increases for many upper middle-income families.
Republicans and Trump argue that sharply cutting tax rates for businesses improves U.S. economic competitiveness.
The emerging plan would retain the Clinton-era 39.6 percent income tax rate for the wealthiest earners. But for that highest bracket, the tax writers raised the minimum level of income to $1 million for couples or families from the current $470,000 — a change that would reduce tax revenue.
Democrats have repeatedly complained the plan was too favorable to business and the wealthy, and contradicted Trump's rhetoric of bringing tax relief and economic benefit to the stressed middle class.
Associated Press writer Alan Fram contributed to this report.