House Republican tax writers on Sunday prepared to make further changes to the sweeping legislation they released last week, including tweaks that could allow upper-middle-class homeowners to deduct more mortgage interest and make more business owners eligible for a lower tax rate.
It is also still possible that a repeal of the Affordable Care Act’s central insurance mandate could be added to the bill, with House Speaker Paul D. Ryan (R-Wis.) signaling in a television interview Sunday that party leaders are still mulling over that decision.
GOP members of the House Ways and Means Committee met behind closed doors Sunday to debate changes ahead of a scheduled “markup” of the tax bill Monday. Lawmakers will debate and vote on changes to the measure during the session, which is expected to last several days.
Two people familiar with the changes — one a senior Trump administration official, the other a lobbyist briefed on the status of the legislation — said the panel is considering increasing the GOP bill’s proposed $500,000 limit on the mortgage interest deduction. That limit could increase to $750,000 or so, the lobbyist said — still short of the current $1 million limit — but enough to ease concerns from lawmakers in states with high costs of living who fear a lower limit could hit middle-class households.
Another potential change, they said, concerns the treatment of “pass-through” businesses — through which a firm’s earnings are passed to its owners to be taxed as individual income. Lawmakers are exploring how to expand eligibility for a new 25 percent rate on that income, in part to address the concerns of the National Federation of Independent Businesses, a lobbying group.
Repealing the Affordable Care Act’s individual mandate could give the tax writers room to make these or other costly changes without exceeding a $1.5 trillion limit on the total cost of the bill over the coming decade. But two GOP officials said Sunday that repealing the mandate might not generate as much revenue as lawmakers hope. Although the Congressional Budget Office estimated last year that a repeal would have a $416 billion positive…