(Recasts with Brady statement, adds Trump, sources)
By David Morgan and Amanda Becker
WASHINGTON, Oct 31 (Reuters) - Republicans in the U.S. House of Representatives will delay the release of long-awaited tax legislation by one day until Thursday, the head of the chamber's tax-writing panel said late on Tuesday.
"In consultation with President Trump and our leadership team, we have decided to release the bill text on Thursday," House Ways and Means Committee Chairman Kevin Brady said in a statement.
"We are pleased with the progress we are making and we remain on schedule to take action and approve a bill at our Committee beginning next week," the Republican lawmaker added.
In a tweet on Tuesday night before Brady's statement, President Donald Trump said: "The Republican House members are working hard (and late) toward the Massive Tax Cuts that they know you deserve. These will be biggest ever!"
Republicans, who control both chambers of Congress, are looking to tax reform for their first legislative victory since Trump took office in January. Democrats say the Trump tax plan is a giveaway to corporations and the rich.
Two sources with knowledge of the discussions said earlier on Tuesday that the bill, which had been expected on Wednesday, would emerge a day later to give lawmakers additional time to address differences over the tax treatment of retirement savings accounts and a deduction for state and local tax payments.
Trump and other top Republicans have proposed a plan that would cut taxes for corporations, small businesses and individuals by up to $6 trillion over a decade and pay for the reductions in part by eliminating trillions of dollars in deductions and other tax breaks that are often fiercely defended.
The U.S. tax code has not undergone a major overhaul since 1986, when Republican Ronald Reagan was president.
Earlier on Tuesday, House Republicans appeared to be nearing a deal on state and local taxes that would preserve a federal deduction for property taxes but not income taxes, potentially removing a major obstacle.
Republican Representative Tom Reed of New York said the "sweet spot" compromise was gaining support among high-tax state lawmakers who have signaled their opposition to a proposal to repeal the state and local tax, or SALT, deduction.
Another New York Republican saw things differently.
"I'm still inclined to be opposed to it. The income tax is a major factor," said Representative Peter King.
"This is going to affect our country for the next 20 years, for good or bad. I think the last time we did tax reform, there was like two years of debate. We're going to have 10 days," he said.
The SALT compromise would reduce, but not eliminate, a disproportional tax impact on upper middle-class families in high-income tax states such as New York, New Jersey and California. Those states send enough Republicans to Congress to derail a tax bill.
The House bill is expected to cut the top corporate income tax rate to 20 percent from 35 percent and phase out the estate tax paid by the wealthiest taxpayers over two or three years. It may also set a repatriation rate for U.S. businesses with profits overseas, according to a source familiar with a Tuesday meeting between House Speaker Paul Ryan and conservative groups.
It is also likely to set a 15 percent minimum tax on active foreign income of U.S. corporations, according to lobbyists with knowledge of negotiations.
TRUMP, PENCE ENGAGED
As the Trump administration escalated its pro-tax plan campaign, Vice President Mike Pence met with Republicans on Tuesday, while Trump hosted industry leaders and then Ryan, at the White House.
Trump said at the White House he wanted Congress to pass tax reform bills by the U.S. Thanksgiving holiday on Nov. 23.
A proposal to limit how much money Americans can direct to their 401(k) retirement accounts and individual retirement accounts (IRAs) on a pre-tax basis is meeting resistance, including from fund managers who handle 54 million such accounts.
Republicans initially proposed capping tax-free 401(k) contributions at $2,400, down from $18,000 in 2017, but the figure is in flux.
"We are either going to strengthen the 401(k)'s and IRA's so people can save more, or we will leave them as is," Brady told reporters.
Senator Heidi Heitkamp, one of a few Democrats being courted by Republicans, said she could not support lowering the cap on tax-free retirement contributions. "I will not vote for that," she told reporters.
(Reporting by David Morgan and Amanda Becker; Additional reporting by Ginger Gibson, Jeff Mason, Susan Cornwell and Richard Cowan; Editing by Diane Craft and Peter Cooney)