Study Shows Senate Tax Reform Plan Would Help the Middle Class

President Trump is winding down his Asia trip where he focused on international trade and the threat from North Korea's nuclear weapons program.

But back in Washington, the economy is the hot topic, specifically the tax reform plans from the Republicans in the U.S. House of Representatives and the U.S. Senate.

Republican lawmakers, and members of the Trump administration, appeared on Sunday talk shows to promote their plans, saying they'll cut taxes for the middle class.

"For most people it may not be a hundred percent, but by far the majority, both the House and Senate versions, provide middle income tax relief," Steven Mnuchin told CNN's Jake Tapper on "State of the Union," on Sunday.

In an interview on NBC's "Meet The Press," Pennsylvania Sen. Pat Toomey said, "It is the most profound tax reform in over 30 years. We're going to take the U.S. business tax code from one of the worst in the world, from the point of view of a potential investor, to one of the best in the world."

The debate is underway now that the Senate has unveiled its own version of the tax plan, largely similar to the House plan but with some key differences. 

While both the House and Senate bills would eliminate deductions for state and local income taxes and sales taxes paid, they differ on property taxes.

The House bill allows homeowners to deduct up to $10,000 in property taxes while the Senate proposal eliminates that entire deduction.

House Ways and Means Chairman Kevin Brady says the House won't accept that. The House plan lets people deduct at least some of their property taxes.

"It's important to make sure that people keep more of what they earn, even in these high-tax states," Brady, R-Texas, said during an appearance on "Fox News Sunday."

At a rally in New York over the weekend, Senate Minority Leader Chuck Schumer, D-N.Y., argued that Republicans should completely restore the state and local deduction.

"If state and local is in this bill, it's a dagger to the heart in New York. It's a dagger to the heart of New Jersey," he said.

"The nine Republican congressman from New York and the six Republican congressmen from New Jersey have our states' fate in their hands," he said. 

Democrats claim the GOP plans will help the rich. 

But POLITICO reports a new study says the Senate plan would mainly help the middle class.  

According to an analysis by the non-partisan Joint Committee on Taxation, moderate income people would see the largest cut in their taxes.

Another big difference is both plans cut the top tax rate on businesses from 35 to 20 percent, but, the Senate plan doesn't start that reduction until 2019, while the House plan starts it next year. 

Supporters say the tax cut is very important to getting the economy growing strongly. 
 
Despite their differences, Republicans in both the House and Senate are trying to move quickly to pass their plans so they can be reconciled into one bill that the president can sign by the end of the year.