• The House GOP unveiled its massive tax reform bill Thursday.
  • Details are starting to emerge -- including a new proposed top tax rate and a compromise on the state and local tax deduction.
  • The bill is the biggest step yet toward the GOP's promised overhaul of the US tax code.

House GOP leaders on Thursday are set to take their biggest step yet in their attempt to overhaul the US tax code by releasing legislation that proposes sweeping changes to the current system.

The "Tax Cuts and Jobs Act" will include a broad set of proposed changes to the corporate and individual tax system, building off a nine-page framework the White House and congressional Republican leaders dropped in September.

President Donald Trump reiterated his desire to get the tax bill on his desk by Christmas during a meeting at the White House on Tuesday. The president also concurred with the timeline House Ways and Means Committee Chair Kevin Brady, the author of the tax bill, has laid out. He wants to pass the plan through the House by Thanksgiving.

While the initial plan will be released Thursday, many GOP members are already suggesting that the bill could be substantially rewritten over the weekend before a scheduled markup in the Ways and Means Committee on Monday.

That would allow Republicans to continue on track for their timeline, while also giving tax writers some leeway to solve issues some members might have with the bill. 

Here are the details that are emerging Thursday morning:

  • The highest tax bracket will remain at 39.6%: According to reports, the plan will propose a fourth marginal tax bracket on high-income earners. It will reportedly apply to married couples making more than $1 million a year.
  • New individual tax brackets:
    • 12%: Applies to incomes up to $45,000 for an individual and $90,000 for a married couple.
    • 25%: Applies to incomes up to $200,000 for and individual and $260,000 for couples.
    • 35%: Applies to incomes up to $500,000 for an individual and $1 million for couples.
  • A deal on the state and local tax deduction: One of the biggest hangups for Republicans in states like New York, New Jersey, and California has been the proposed elimination of the state and local tax (SALT) deduction. The benefit allows people to deduct those taxes from their federal bill. Brady said Tuesday the GOP reached a deal that would allow people to deduct state and local property taxes up to $10,000 but not income or sales taxes.
  • Corporate tax cut will be immediate and permanent: What exactly to do with the corporate tax rate has been a fluid situation over the past week, but it appears the cut to 20% from the current 35% will happen as soon as the tax bill cuts in and is designed to be permanent. Reports on Monday suggested Republicans were considering phasing in their proposed slash of the corporate tax rate over five years, with the rate declining by 3 percentage points a year and eventually hitting 20% in 2022. On Tuesday, Republicans were considering making the tax cut only temporary and a phase out of the tax cut in the last year of the 10-year budget window.
  • Elimination of the estate tax: The threshold for the tax, which only applies to estates with greater than $5.6 million in assets during 2018, would double to over $10 million. Then, the plan would phase out the tax after six years. The Senate GOP appears to be mulling preserving at least part of the tax.
  • Repatriation tax rate: The repatriation rate on overseas assets for US companies would be as high as 12%. The bill also may include a mandatory repatriation of all foreign assets. Illiquid assets would be taxed at a lower rate, spread out over a longer period of time than liquid assets like cash.
  • No repeal of Obamacare's individual mandate: Despite Trump's last minute push to eliminate the penalty for not having insurance, such a provision will not be included in the plan.
  • No changes to 401(k) plans: Despite a back and forth between House tax writers and the White House that appeared to suggest some change to retirement savings accounts would be included in the tax bill, there will be no changes in the first iteration.
  • Increase in the size of the child tax credit. A pet project of Ivanka Trump, the proposal is to increase the credit to $1,600 from $1,000. The bill would also add a credit of $300 for each non-child dependent or parent for 5 years, after which that provision would expire.
  • Limiting home mortgage interest deduction: On new home purchases, interest on loans up to $500,000 would be deductible. The current limit is $1 million.
  • A larger standard deduction. To avoid raising taxes on those currently in the 10% tax bracket, the standard deduction for all taxes would increase to $12,000 for individuals (up from $6,350) and $24,000 for married couples (up from $12,700). These are slightly less than the doubled deductions expected -- and as Business Insider's Josh Barro noted, the idea that this would save people money may be misleading since it eliminates other personal deductions and a secondary standard deduction.
  • A 25% rate for pass-through businesses. Instead of getting taxed at an individual rate for business profits, people who own their own business would pay at the so-called pass-through rate. There will be some guardrails on what kinds of businesses can claim this rate, to avoid individual abusing the lower tax.
  • Elimination of most personal itemized deductions and many credits. The only deduction preserved explicitly in the plan is for charitable gifts and and edited home-mortgage interest. Some of these include:
    • Elimination of the student loan interest deduction: The amount paid toward student loan interest can currently be deducted.
    • Elimination of the medical expense deduction.
    • Elimination of the adoption tax credit.
  • Repeal of the alternative minimum tax (AMT): The tax, which forces people who qualify due to an outsized number of deductions, would be eliminated under the legislation. Incidentally, Trump's own tax bill has been shown to be millions of dollars more because of the tax.

As details of the bill began to trickle out, reactions already started to come out. The changes to the mortgage-interest deduction and other provisions sent stocks of homebuilders sliding. The SPDR S&P Homebuilders ETF was down roughly 2.5% as of 10:45 am ET, and shares of major builders D.R. HortonPulte Group, and Lennar all slipped.

Additionally, politicians and advocacy groups immediately rushed to react to the bill.

Republican Senator Marco Rubio criticized the size of the increase for the child tax credit on Twitter, saying it did not go far enough.

"House #TaxReform plan is only starting point. But $600 #ChildTaxCredit increase doesn’t achieve our & @POTUS goal of helping working families," Rubio said.

Oxfam, a global charity focused on fighting poverty and economic inequality, attacked the bill.

"This tax reform bill is Robin Hood in reverse; it robs from the poor and gives to the rich," said OxFam America Policy Direcotr Gawain Kripke in a statement. "It will entrench and increase economic inequality in the US and internationally."

This post originally appeared on Business Insider.