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CHRIS ZOELLER, The Globe Gazette 

St. Ansgar fans celebrate in the stands after the Saints first touchdown of the game Friday against Hudson in the Class A semifinal round at UNI-Dome in Cedar Falls. For more, turn to Page B1. 


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AP
Tax split between House, Senate poses a big challenge

WASHINGTON — The House and Senate tax overhaul plans are broadly similar, but crucial differences are creating headaches for Republican leaders determined to keep myriad interest groups and factions of the GOP satisfied. And then there's the ambitious timetable they've set of finishing in time to get legislation to President Donald Trump by Christmas.

The most politically challenging decisions involve dealing with popular and widely used tax deductions, structuring tax cuts for business and balancing personal income tax rates between middle-class families and the rich.

All of these decisions come against a generous — but firm — 10-year, $1.5 trillion cap on the measure's cost to the federal deficit. Both House and Senate have adopted accounting gimmicks to squeeze tax cuts that appear larger down to fit that restraint.

Trump's enormously expensive demand for a cut in the corporate tax rate to 20 percent — from the current 35 percent — is a big complication, as is unrest among House Republicans hailing from affluent suburban districts who are upset over the proposed loss of the deduction for state income taxes.

Here's a rundown on the major differences between the House and Senate bills:

Individual tax rates

The Senate measure keeps the current number of personal income tax brackets, seven, though it changes the rates to 10, 12, 22.5, 25, 32.5, 35 and 38.5 percent. That last top bracket for the wealthiest earners carries a higher rate of 39.6 percent under current law.

The House bill goes further toward simplifying the tax system. It shrinks the number of brackets from seven to four, with rates of 12, 25, 35 and 39.6 percent.

Lots of numbers here for congressional negotiators to play with, to move up or down.

The inheritance tax on multimillion dollar estates, called the estate tax, is an especially hot-button issue. Democrats point to the proposed GOP changes as proof that the Republicans are out to help wealthy people like Trump and his family.

Currently, when someone dies, the person inheriting the estate must pay taxes on its value above $5.5 million for individuals, $11 million for couples. The House bill initially doubles those limits and then repeals the whole tax after 2023. The Senate version doubles those exemption amounts — but doesn't repeal the tax.

To repeal or not to repeal? That may be the class-warfare question.

Deductions

The Senate bill would eliminate a taxpayer's ability to deduct state income taxes and local property taxes. But the final bill may have to closely track a House compromise that provides a property tax deduction of up to $10,000 or else risk a revolt from GOP lawmakers from New York, New Jersey, and California.

The Senate bill preserves popular individual tax breaks for large medical expenses, mortgage interest, electric vehicles and college costs that were targeted by the House. The House limits deductibility of mortgage interest to the first $500,000 of a loan, riling the real estate and housing industries, and eliminates a deduction for medical expenses that's often taken by families facing crippling nursing home costs.

Business

Both the House and Senate versions slash the tax rate for corporations to 20 percent from the current 35 percent. But there's a big twist: The Senate bill delays the rate cut for a year.

The delay was put in to reduce the bill's cost by $100 billion or so — but it's opposed by the White House and House Republicans. Wall Street hates it too. U.S. stock markets sold off Thursday in response to news of the proposed deferral, with industrial and technology stocks leading the decline, before recouping some of the losses by the close of trading.

Might the implementation delay be traded for a smaller corporate tax cut, something above 20 percent?

Trump actually had been demanding 15 percent and reportedly was initially furious at the 20 percent figure. The issue is setting the corporate rate at a level that experts and tax writers believe would bring the U.S. closer to its overseas competitors.

The electric car industry — notably makers Tesla and Chevrolet — and producers of wind power for generating electricity are losers under the House bill. The tax credit of up to $7,500 for plug-in electric vehicles would be repealed, and the credit for wind energy would be reduced. But the Senate version retains the incentives.

The loss of tax credits for renewable energy would free billions to help pay for the corporate tax cuts in the legislation. But in addition to environmentalists' objections, the prospect also angers some Republican senators, including powerful Chuck Grassley of Iowa, who has vowed to defend the credit.

There's a special rate for businesses whose profits are counted in the owners' personal tax returns. Millions of U.S. businesses use this "pass-through" format. The House bill taxes many of them at a maximum 25 percent, down from 39.6 percent currently, and adds a lower minimum rate. The Senate version would set a new 17.4 percent deduction for "pass-through" income, aimed to help smaller businesses.


Iowa
Ag secretary warns Iowa farmers NAFTA talks could get 'bumpy'

URBANDALE | U.S. Agriculture Secretary Sonny Perdue told Iowa farmers Friday to expect a "bumpy ride" as the Trump administration works to renegotiate the North American Free Trade Agreement — but to look for good results in the end.

On his fourth trip to Iowa — the most to any state — Perdue met with veterans, farmers and agriculture officials at a breakfast forum where trade, infrastructure, taxes, regulations, rural broadband, Department of Agriculture appointees and farm bill policies and provisions were on the menu.

On appointees, Perdue said he wants to see Iowa Agriculture Secretary Bill Northey confirmed to a top USDA post "as quickly as possible." But he added the administration won't meet with Texas Sen. Ted Cruz, who is delaying the confirmation in a dispute over the Renewable Fuel Standard, which he has spoken against, because it has been U.S. policy "not to negotiate with hostage-takers."

NAFTA negotiations with Mexico and Canada got off to a rocky start after President Donald Trump moved into the White House and are slated to resume later this year. Attendees at the breakfast expressed concern that states dependent on exports are worried about a financial "train wreck" if disputes don't get resolved.

"Hang on and don't get overly anxious. I think we'll get there," was the USDA secretary's advice.

"This not going to be a smooth negotiation. I think you already see that," Perdue told a crowd that included U.S. Rep. David Young, a Van Meter Republican. He said Trump is a tough negotiator who wants a "more U.S.-friendly" deal than is in place now.

"I think we will get to a good agreement for American farmers and producers. But again it may be bumpy in the meantime. There may be some speed bumps there that create anxiety. You know farmers don't need a lot to be anxious about in these kind of days of low-commodity prices, so the administration and the president knows how important agricultural trade is," he added. "I'm hopeful, I'm optimistic that we'll get a deal at the end of the day."

During his stop, Perdue was asked about the status of Northey's nomination to be USDA Undersecretary for Farm Production and Conservation, which has been blocked in the Senate by Cruz, R-Texas, in what Perdue described as "an intraparty squabble" over renewable fuels.

Perdue called Northey "an authentic farmer" and an experienced leader whose expertise is needed, while expressing disappointment and frustration with the Senate confirmation process.

"I wish I would have brought my 'Free Bill Northey' t-shirt," Perdue later told a roundtable meeting on agriculture tax and insurance issues he held with a group of Iowa farmers, agribusiness representatives, Gov. Kim Reynolds and Young at a Johnston insurance company headquarters.

Perdue told reporters after the breakfast forum in Urbandale that he expected Sam Clovis would continue to serve within the administration after the White House liaison with the USDA last week withdrew his nomination to be the agency's chief science officer.

"I think Sam made a very selfless, courageous decision when he realized that his situation was being drug into the whole Russia deal, which has gone on way too long," Perdue said. "I think he didn't want the president to be distracted in that way."

Court records this month revealed the Clovis, an Iowan who served as a Trump campaign adviser, encouraged another campaign adviser to meet with Russian interests. That meeting never took place.


Local
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Mason City's mayor-elect learned about public service at the dinner table

MASON CITY | Newly-elected Mayor Bill Schickel thinks he developed his interest in public service when, as a child, he sat at the dinner table with his 10 brothers and sisters in Loveland, Ohio, a suburb of Cincinnati.

"There were 13 of us, counting Mom and Dad, and some of my fondest memories are those dinner table conversations," said Schickel. "It was a big table," he said with a laugh.

"Dad wanted us to have well-articulated positions on things — well thought out and well said."

He wasn't the only Schickel who got the political vibe from those family conversations. His brother John is a state senator in Kentucky. His brother Joe is a former city councilman in Loveland. His sister, Anna, is married to Bill Haine, a state senator in Illinois.

Schickel, 66, who was elected to his fourth, non-consecutive term as mayor Tuesday, had no trouble identifying what his major goal will be when he takes office in January.

"The River City Renaissance project," he said without hesitation. "We have to see that through."

Schickel said the "Mason City Says Yes" committee did a great job of organizing support for the two ballot issues that were approved, and showed what can happen when the community comes together.

Schickel said many things have changed since he was first elected mayor in 1989. "The media landscape has totally changed. The internet didn't exist. There was no social media. All of that has changed the political dynamic.

"One thing that hasn't changed is the number of good people who want to help get things done. We can accomplish a lot by working together. I'm excited about that," he said.

Schickel grew up in Loveland and graduated from the University of Cincinnati with a degree in broadcasting and journalism.

He said his first knowledge of Mason City came as a youth when his father, a stained-glass artist, had an exhibit at the MacNider Art Museum.

Schickel came to North Iowa and became the Clear Lake reporter for the Globe Gazette in 1978. He began work at KIMT-TV in 1980 and worked there for nine years, including time as the noon anchor, when he resigned to run for mayor.

He defeated incumbent mayor Stan Romans and served four years when his political career came to an abrupt but temporary halt. The City Council decided to change the mayoral position from full-time to part-time — and did it by cutting the salary by about $25,000. Schickel, with a wife and young family, chose not to run again.

During his hiatus from city politics, he experienced his only loss for public office. Schickel, a Democrat at the time, switched to the Republican party and ran unsuccessfully against incumbent Democrat Dennis May for the state Legislature in 1994.

Three years later, he had a full-time job as general manager of KCMR radio and had the station's permission for him to enter the political ring again. In 1997, he ran for mayor and once again defeated an incumbent, Carl Miller, and was re-elected in 2001.

Not long into that term, he resigned to run for the state Legislature and served three terms before retiring. He also held several positions in the state Republican Party.

In 2015, he returned to city politics, winning election to the City Council to fill a vacancy created when At-Large Councilman Scott Tornquist moved out of state.

Earlier this year, he decided to make another run for mayor. His motivation was simple, he said. "I love the job."

He said he is committed to communicating with the public as best he can. He plans to have regularly-scheduled press conferences, regular office hours in which he will encourage the public to drop in and will attend as many public functions as his schedule will allow.

Schickel and his wife Candi, a Mason City attorney, have three grown children.

He and Candi met when both were attending an exercise class at the old YMCA. "We met when we literally bumped into each other on the gym floor," Schickel said.

They have been married for 31 years.