Tax cut passes US House of Representatives

Tax cut passes US House of Representatives

The most comprehensive revamp of the nation's tax code in three decades now heads to the Senate for a decisive vote expected to take place Tuesday night.

US Congress
Republican members of the US House of Representatives Intelligence Committee refused to attend a subcommittee hearing on technology and national security. (AFP Photo)

WASHINGTON: The Republican-controlled US House of Representatives passed a landmark tax overhaul on Tuesday (Dec 19), bringing Donald Trump one step closer to a major legislative triumph as the first year of his presidency draws to a close.

Republicans received zero Democratic support as they passed the contentious US$1.5-trillion package of tax cuts for businesses and individuals that critics say will particularly benefit the wealthy.

The most comprehensive revamp of the nation's tax code in three decades now heads to the Senate for a decisive vote expected to take place Tuesday night.

Twelve House Republicans joined all Democrats in opposition, as Speaker Paul Ryan emphatically declared the bill passed by 227 votes to 203, drawing loud cheers and applause from Republicans in the chamber.

"Today we are giving the people of this country their money back," Ryan told his colleagues, framing the effort as a once-in-a-generation opportunity for change. "This is their money after all!"

After the dramatic failure to repeal the healthcare law of his predecessor Barack Obama, Trump has pushed hard to get the tax cuts across the finish line.

While Trump has billed the tax package as a "Christmas gift" for the country, one Democrat, the liberal congresswoman Barbara Lee, branded the measure "a slap in the face to low and middle-income families."

The bill shifts to the Senate, where the margin of support appears to be tighter. Majority Leader Mitch McConnell said a final vote would likely occur during Tuesday night's session.

"Congress is standing at the doorstep of an historic opportunity," said the veteran Senate Republican.

Should the Tax Cuts and Jobs Act make it into law it would be the Republicans' first major legislative victory in the 11 months since Trump's inauguration.

The Republican plan is projected to add nearly US$1.5 trillion to the national debt over the coming decade, according to the Joint Committee on Taxation.

But that figure drops to about US$1 trillion when economic growth is accounted for.

Ryan predicted the bill will give a needed jolt to the economy and to struggling American families.

'MORAL OBSCENITY'

He stressed that a median-income family of four earning US$73,000 annually would save US$2,059 in taxes next year.

The Democratic opposition has denounced the measure as mostly benefiting companies and the wealthiest Americans - including Trump himself.

They also warn the reform risks blowing a hole in the national debt, which has surged past US$20 trillion.

"Here we are, watching the fiscal hawks of the Republican Party blow through every red light on their way off the cliff," declared House Democrat Terri Sewell.

Republican leaders unveiled their final version of the bill only late last week, after a period of negotiations between the House and Senate to iron out differences.

Trump has demanded the bill be on his desk by Christmas.

His party holds a 52-48 majority in the Senate, and can afford only two defectors.

With Senator John McCain, who has brain cancer, announcing he is undergoing treatment and will not return to Washington until January, that number shrinks to just one, although no Republicans are publicly opposed to the measure.

Vice President Mike Pence, who is president of the Senate, would be called on to cast the deciding vote in case of a deadlock.

Under the legislation, the federal corporate tax rate would fall from 35 per cent to 21 per cent - a notch up from the 20 per cent in previous versions - and the maximum individual income tax rate, for the nation's wealthiest, would drop from 39.6 per cent to 37 per cent.

The bill also doubles the standard deduction for families, and doubles the child tax credit, provisions Republicans say will help middle class families.

But it also provides a clear boon for the wealthy, including a doubling of the amount of money that can be exempted from inheritance tax.

Top House Democrats Nancy Pelosi called the bill a "moral obscenity." "This GOP tax scam is simply theft - monumental brazen theft - from the American middle class," she said.

While Republicans failed earlier this year to repeal and replace Obamacare, the tax plan takes a key step in that regard, by scrapping the individual mandate that requires nearly all Americans to have health insurance or pay a fine.

Because the government subsidises some health plans under Obamacare, repealing the mandate is projected to free up US$338 billion over 10 years to help pay for the overhaul, but Democrats and several experts warn it would also lead to 13 million fewer people with health insurance over the next decade.

Source: AFP/de

Bookmark