The U.S. House of Representatives approved the final version of a GOP-backed tax plan Tuesday that would overhaul the nation’s tax laws for the first time in decades. The Senate is expected to vote and clear the bill later Tuesday.
The bill passed along partisan lines at 227 for and 203 against. Twelve Republicans voted against the bill. No Democrats voted for the bill.
If the Senate clears the bill, as it’s expected to do, it will then head over to President Donald Trump’s office to be signed into law. Passage of the tax reform bill would deliver Trump and congressional Republicans a significant victory in 2017 and allow the president to stick to his promise to enact tax relief before the end of the year.
To pass the Senate, the GOP tax bill must receive 51 votes. The Republican Party holds 52 seats. Arizona Republican John McCain will miss the GOP tax bill vote. Vice President Mike Pence could pass the tie-breaking vote if another Republican voted no. But one no vote is all the Republicans can afford.
The controversial tax reform bill, also known as the Tax Cuts and Jobs Act, hasn’t sat well with more than half of Americans, who say it would help neither their family’s financial situation nor the U.S. economy, according to research by Gallup.
The tax bill lowers the corporate tax rate from 35% to 21%, eliminates the penalty under the Affordable Care Act for failing to have health insurance, a narrower estate tax, and cuts the top effective marginal tax rate for S corporations to a top rate of 29.6 percent, among other measures that gives the biggest breaks to the wealthiest individuals and companies.
The biggest winners are business owners, corporate shareholders, and many workers who will see reduced tax withholding from their paychecks. The bill would reduce taxes by about $1,600 on average in 2018, with the biggest benefit going to households making between $308,000 and $733,000, according to a recent analysis by the Tax Policy Center. Middle-income taxpayers would pay about $930 less than under current law, or about 1.6 percent of after-tax income, the Tax Policy Center says.
However, some households, particularly those in regions with high state and local taxes, will lose under the tax reform bill. And the effects of the tax cuts will change dramatically after 2025 when individual income tax cuts are scheduled to expire, reported the WSJ.