House Republicans unveiled their plan to overhaul the tax code on Thursday in what could be the biggest rewriting of the system in decades.
For President Donald Trump, who has repeatedly pledged to slash taxes, passing the Tax Cut and Jobs Act would give him his first major legislative win of his administration.
As part of that reform package, the GOP aims to permanently lower the corporate tax rate to 20 percent. The House bill would also slash the number of income tax brackets from seven to four: 12 percent, 25 percent, 35 percent and 39.6 percent.
The bill seeks to raise the child tax credit to $1,600 from its current maximum of $1,000. It also preserves popular retirement savings plans like 401(k)s and Individual Retirement Accounts.
Under current law, taxpayers can put a specified amount in 401(k) retirement savings plans without paying taxes upfront. The amount workers can contribute to a 401(k) rises to $18,500 next year, up from $18,000 in 2017. People age 50 and older can tack on a so-called catch-up contribution of $6,000.
The GOP bill would also allow taxpayers to write off up to $10,000 in state and local property taxes.
But the plan would cut a popular mortgage interest deduction in half. While it would maintain the current deduction of $1 million in mortgage debt for current homeowners, that cap would be slashed to $500,000 for newly purchased homes.
Homebuilder stocks were hit hard on the plan. Both the SPDR S&P Homebuilder ETF and the iShares U.S. Home Construction ETF fell more than 2 percent, pacing for their worst daily performances in about a year.