House clears GOP tax overhaul for Trump’s signature
President Donald Trump is poised to sign a historic tax overhaul bill after the House and Senate gave their final blessing to it on Wednesday, a moment years in the making for Republicans that lets Trump fulfill a key campaign promise.
Republicans will now have to sell the bill to what polls show is a skeptical public, as they try to turn the legislative victory into a major political asset for the 2018 mid-term election.
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Supporters say the $1.5 trillion legislation – which includes steep individual and business tax cuts along with other changes to U.S. tax law — will broadly boost the U.S. economy and lift household finances at the same time.
“The key question here is does America continue to settle for slow growth and paychecks that never seem to grow, or do we make America competitive again?” House Ways and Means Committee Chairman Kevin Brady (R-Texas) said shortly before the 224-201 vote. “This lets our families and small businesses keep more of what they earn so that their communities and our country can grow again. This is a bold reform that shakes America out of its doldrums and gets our jobs coming back to America.”
But Democrats are determined to make the legislation an anchor that they say will help drag down Republicans in 2018. They argue the bill is a giveaway to the rich – including the entire Trump family –and profitable corporations, while doing little or nothing for the middle class and lower-income Americans.
“They’re putting this on the credit card, $2.3 trillion in borrowing for the purpose of cutting the top tax rate from 39.6 percent to 37 and calling it middle-class tax relief,” said Ways and Means ranking member Richard Neal (D-Mass.). “It’s nonsense.”
Exactly when Trump will sign the bill was an open question Wednesday. National Economic Council Director Gary Cohn suggested that Trump could hold off until Republicans waive a mandatory budget rule to cut Medicare and other government programs that would otherwise go into effect due to the deficit increase caused by tax cuts.
If Republicans are able to waive the rule in year-end funding legislation lawmakers are expected to turn to next this week, “we will sign the tax bill this year,” Cohn said at an event hosted by Axios.
White House Press secretary Sarah Huckabee Sanders said there would be a “bill passage event” at the White House at 3 p.m. with members of the House and Senate.
“This is not a signing event as the bill would still need to be enrolled and that will happen at a later date. We will keep you posted on details as they are confirmed,” she said.
Trump hailed the legislation on Twitter Wednesday morning while taking a shot at critics.
“The Tax Cuts are so large and so meaningful, and yet the Fake News is working overtime to follow the lead of their friends, the defeated Dems, and only demean,” the president wrote on Twitter. “This is truly a case where the results will speak for themselves, starting very soon. Jobs, Jobs, Jobs!”
Sharply cutting the corporate tax rate is a central part of the plan. Corporations will face a 21 percent statutory tax rate starting in 2018, down from 35 percent, and most non-corporate businesses organized as “pass-throughs” will get taxed at less than 30 percent. Pass-throughs pay taxes on the individual side of the tax code and range from corner groceries to the Trump Organization.
Multinational corporations would get a long-sought change in the way their overseas profits are taxed. They will now only pay taxes in the country where their profits are booked, instead of facing a U.S. tax on top of that.
But they will also be required to bring home some of the money they have already built up abroad, at a one-time tax rate of 15.5 percent.
Changes for individuals include lower rates for each of the seven brackets, topping out at 37 percent, a doubled standard deduction and a boost in the child tax credit, though all on a temporary basis.
But there are also new limits on longstanding breaks for homeowners and people who live in high-cost parts of the country, which will pare how much they can deduct in interest on their home loans and state and local taxes.