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00:00:00
>> The yeas are 51.>> Momentum is building for Republican's tax reform plan after an impressive display of unity in the Senate gets them over the first hurdle, now the real fun begins.>> I'm Andy Sullivan in Washington where Republicans are moving as quickly as they can to overhaul the tax code after passing a framework that allows them to bypass the Democrats.
00:00:19
With that framework in place now they're going to fill in the details, and here's were it gets tricky. They're hoping to simplify the tax code by eliminating loop holes. But millions of Americans benefit from those loop holes, and they're gonna fight fiercely to keep them in place. Here's one example, the current carve-out for state and local taxes.
00:00:38
As it stands now when Americans calculate how much they owe Uncle Sam, they can simply subtract their state and local taxes. The idea being that they shouldn't have to pay tax on income they're handing over to another level of government. This is a big benefit to people in high tech states like New Jersey and Maryland.
00:00:54
But not so much for those in low-tax states like Florida and South Dakota. It's also a big deal for wealthier people who pay more taxes overall. House Speaker Paul Ryan and other top Republicans want to eliminate this tax break which costs the federal government nearly $100 billion a year in lost revenue.
00:01:11
Saying they can use that money to lower tax rates for everybody. Most republicans are on board with this idea, that's because they represent areas where this tax break isn't widely used. But at least 19 House Republicans represent districts where it's a major issue, used by more than four out of ten households.
00:01:28
Those same lawmakers also happen to be the most vulnerable in next years congressional elections. So they'll be fighting like lions to keep this deduction in place. They don't wanna infuriate their voters with a tax hike just when they're up for re-election. This is one of many tough tradeoffs Republicans will have to weigh in the months ahead.
00:01:45
They'll also have to wrestle with tax rates for retirement savings, health insurance, and countless other topics. And as we saw with their failed effort to repeal Obama Care, once you start messing with things that affect everybody, like healthcare and taxes, things can get real messy in a hurry.
00:02:00
Republicans are off to a promising start, but they'll be entering far trickier waters in the weeks ahead.