Congress Passes Historic Tax Reform Bill
The Tax Cuts and Jobs Act will make its way to President Donald Trump’s desk just ahead of Christmas, providing GOP lawmakers with their first major legislative win of the 115th Congress.
Its passage comes after Republicans faced a procedural hiccup, forcing the House to vote on the measure a second time after provisions violating Senate procedural rules were dropped from the bill.
The legislation passed the lower chamber in a 224-201 vote along party lines Wednesday afternoon, with 12 Republicans — largely from high-tax- states — joining Democrats in voting against the conference report. The House initially passed the bill Tuesday in a 227-203 vote.
House Ways and Means Committee Chairman Kevin Brady said it was just as exciting pass the measure the second time around.
“Look we believe in this bill in a big way, so getting it approved and so getting it approved and sent the president’s desk is this is a historic day for America,” he told reporters Wednesday.
The Senate sent the revised measure back to the House early Wednesday morning after passing it in a 51-48 vote.
Republican Arizona Sen. John McCain was absent for the vote after being hospitalized last week due to complications with side effects from his cancer treatment.
The bill’s passage marks the largest overhaul to the U.S tax code in over three decades. Despite criticism from Democrats, Republicans say they’re confident the changes will spark economic growth and increase wages.
Senate Majority Leader Mitch McConnell said Republicans plan to continue to promote the bill after its implementation.
“My view of this is if we cant sell this to the American people we ought to move into another line of work,” he told reporters. “This is an important accomplishment for the country that people will value and appreciate, but obviously it requires us to continue this discussion with the American people, and we’re all going to be doing that throughout the year.”
Conferees released the final bill Friday evening after days of negotiations. Senate Democrats opted to challenge a number of provisions, arguing they didn’t comply with the Byrd Rule, a reconciliation bill requirement.
The $1.5 trillion tax package dramatically reduces the corporate rate from 39.5 percent to 21 percent and brings down individual rates. It includes seven individual tax brackets falling at 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent and 37 percent.
While GOP lawmakers aimed to make both the individual and corporate reductions permanent, the individual rate deduction is slated to expire in 2025.
House Speaker Paul Ryan assured Republicans are working to secure the permanency of the cuts.
“We have every intent to make those permanent,” he told reporters Tuesday, “because of the Senate Rules you know why that sunset is there.”
In addition to reducing rates, the measure doubles the standard deduction, allows for the deduction of state and local taxes up to $10,000, expands the child tax credit from $1,000 to $2,000 — which is fully deductible up to $1,400 for families making under $400,000 — and allows homeowners to deduct mortgage interest on their first and second homes up to $750,000.
Following the GOP’s botched attempts to repeal and replace the Affordable Care Act earlier this year, its passage was critical for Republicans looking for a win ahead of the 2018 midterm elections.