(Recasts first paragraph, adds business reaction, quote from Speaker Ryan and Trump statement)
WASHINGTON, Nov 2 (Reuters) - U.S. House of Representatives Republicans unveiled long-delayed legislation on Thursday to deliver deep tax cuts that President Donald Trump has promised, setting off a frantic race in Congress to give him his first major legislative victory.
The bill, representing what would be the largest overhaul of the U.S. tax system since the 1980s, called for slashing the corporate tax rate to 20 percent from 35 percent, cutting tax rates on individuals and families and ending certain tax breaks for companies and individuals.
But congressional passage was far from certain, and some business groups quickly came out against it. Contentious provisions will test Republicans, who control the White House and both chambers of Congress but have been unable to deliver any major legislative achievements for Trump since the businessman-turned-politician became president in January.
"This is a very important and special moment for our country, for all Americans. Are we going to let the defenders of the status quo win and see our country continue down this downward spiral?" Republican House Speaker Paul Ryan asked, despite data showing about eight straight years of economic growth.
Trump has asked Congress to pass the tax overhaul by the U.S. Thanksgiving holiday on Nov. 23, an ambitious goal for such a long, multi-faceted piece of legislation. The administration earlier in the year had set an August goal for tax legislation to be passed.
Trump called the bill an "important step" toward tax relief for Americans, adding in a statement, "We are just getting started, and there is much work left to do."
The bill presented by the tax-writing House Ways and Means Committee would consolidate the current number of tax brackets to four from seven: 12 percent, 25 percent, 35 percent and 39.6 percent. An earlier Republican tax outline had called for cutting the top rate for the highest earners to 35 percent.
A number of provisions in the bill would hit taxpayers in Democratic-leaning states hardest, like rolling back deductions for state and local taxes and cutting in half the popular mortgage interest deduction.
The National Association of Home Builders blasted the legislation, saying it would damage home prices and punish homeowners in urban areas.
"We're concerned if enacted, this bill will throw us back into another housing recession," Jerry Howard, the group's president, said in an interview.
The group said the provision in the bill capping the interest deduction for future home purchases at $500,000 - half the current amount - was unacceptable. Howard said 7 million homes are currently above $500,000 and in high-cost regions like Washington, D.C., New York City, California and Hawaii, the impact would be felt the most.
The National Federation of Independent Business, the influential small business lobby, also came out against the bill.
With Democrats solidly opposed to legislation they see as a giveaway to corporations and the rich that would expand the federal deficit, Republicans can ill afford to lose many in their own ranks as they aim to pass the bill in the coming weeks.
The bill's architects avoided one showdown by deciding not to make changes to the popular tax-deferred 401(k) retirement savings program.
The bill would roughly double the standard deduction for individuals and families.
It would repeal the existing deduction for state and local income and sales taxes, and would cap the deduction for state and local property taxes at $10,000. Those provisions would most affect Americans in higher-tax states such as California, New York, New Jersey, Pennsylvania and Illinois.
The House GOP bill would also phase out tax-exempt financing for sports stadiums and subject large private universities like Harvard and Stanford to 1.4 percent excise tax on investment income. It would also repeal a long standing prohibition on religious institutions being involved in political activities.
The bill would create a new family tax credit, double exemptions for estate taxes on inherited assets and gradually repeal the estate tax paid by only the richest Americans, while also allowing small businesses to write off loan interest.
The bill would cap the maximum tax rate on small businesses and other non-corporate enterprises at 25 percent, down from the present maximum rate on "pass-through" income of 39.6 percent. It would set standards for distinguishing between individual wage income and actual pass-through business income to prevent tax-avoidance abuse of the new, lower tax level.
It would create a new 10-percent tax on U.S. companies' high-profit foreign subsidiaries, calculated on a global basis, in a move to prevent companies from moving profits overseas.
Foreign businesses operating in the United States would face a tax of up to 20 percent on payments they make overseas from their American operations.
U.S. equities have rallied in 2017 to a series of record highs, partly on expectations of deep corporate tax cuts. They were down slightly on Thursday as initial details of the Republican plan emerged. Housing stocks tumbled; bank stocks initially fell but then cut their losses.
Investors cautioned the tax plan was preliminary and it was too soon to gauge the effect on specific industries.
Congress has not succeeded with comprehensive tax changes since 1986, when Republican Ronald Reagan was in the White House and Democrats controlled the House. Bipartisan cooperation led to the passage of that plan, but Republicans have frozen Democrats out of the process of developing this legislation and passed a budget plan that would enable them to pass it with no Democratic votes.
Brady himself predicts the initial legislation will change next week, when his panel is due to begin preparing it for an eventual House vote.
The bill must also pass the Senate, where Republicans hold a slimmer 52-48 majority and earlier this year failed to garner enough votes to pass a major healthcare overhaul.
(Reporting by Amanda Becker and David Morgan; Additional reporting by Ginger Gibson, Richard Leong, Susan Heavey and Susan Cornwell; Writing by Will Dunham; Editing by Lisa Von Ahn and Nick Zieminski)