The US House of Representatives on 16 November 2017 approved H.R. 1, Tax Cuts and Jobs Act), containing a broad package of tax cuts affecting businesses, individuals and families. Reuters said this has moved Republicans and President Donald Trump an important step closer to the biggest tax code overhaul in a generation.
The largely party-line 227-205 vote in the House has shifted the tax debate to the US Senate, where that chamber’s separate own tax reform bill has already encountered resistance from some Republicans.
“Passing this bill is the single biggest thing we can do to grow the economy, to restore opportunity, to help these middle-class families that are struggling,” House Speaker Paul Ryan told lawmakers before the vote.
Congress has not thoroughly overhauled the sprawling US tax code since Republican Ronald Reagan was President. The House measure is not as comprehensive as Reagan’s 1986 sweeping package, but it is more ambitious than anything since then.
Reuters said the path forward for the tax plan in the Senate, where Republicans have a narrow majority, is fraught with political obstacles involving the US federal deficit, healthcare and the distribution of tax benefits. The tax reform package will be a challenge in the 100-seat Senate, where Republicans can lose no more than 2 votes from their 52-48 majority if they hope to enact tax reform.
Senate Republican tax writers made the risky decision to tie their plan to a repeal of the requirement for people to get healthcare insurance under former President Barack Obama’s Affordable Care Act. That exposed the tax initiative to the same political forces that wrecked Republicans’ anti-Obamacare push earlier this year, Reuters said.
The Senate version has already faced criticism from several Republican lawmakers, including Senator Susan Collins, who helped sink the Republican effort to repeal Obamacare.
The House bill, which is estimated to increase the federal deficit by nearly US$1.5 trillion over 10 years, would consolidate individual and family tax brackets to 4 from 7 and reduce the corporate tax rate from 35% to 20%, plus introduce a host of major international tax reforms.
The House and Senate versions will eventually have to be reconciled before they can be sent to President Trump’s desk for his signature. “We’ll find a middle ground and we’ll get it to the President’s desk … This is a big deal for us,” Republican Representative Tom Cole told MSNBC.