Congressional Republicans have released the finalized text of the Tax Cuts and Jobs Act, as determined in conference between the House and the Senate. The bill is now two floor votes away from President Donald Trump's desk.
The House Ways and Means Committee and the Senate Finance Committee published the conference version of the bill, promising to “make the tax code simpler and fairer,” on Friday afternoon. Some of the measures will take effect as early as February 2018, Trump said earlier this week.
The GOP estimates that a family of four with a median household income of $59,000 will see $1,182 of their taxes cut.
After coming under pressure from Senators Mike Lee (R-Utah) and Marco Rubio (R-Florida), the Child Tax Credit has doubled, from $1,000 to $1,600 for single filers and married couples, according to a policy highlights document provided by the House Ways and Means Committee. Rubio declared his support for the bill earlier Friday after vowing a “No” vote Thursday.
The bill is widely expected to pass the House and Senate next week, although a few Republican senators have yet to make clear their position on the bill. The House will vote on Tuesday, and then the Senate will follow, according to lawmakers, The Hill reported.
Americans will be taxed at seven different rates, from zero percent, 10, 12, 22, 24, 32, 35 and 37 percent. High-income Americans continue to pay 39.6 percent in income tax.
Standard deductions will increase from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples.
Local and state taxes will still be able to be written off, with a limit of $10,000.
The Obamacare, or Affordable Care Act, individual mandate penalty is repealed in 2019 under the bill. Current law requires all Americans to carry health insurance or pay a fine. Supporters of Obamacare warn that without the fine enforced, not as many young and healthy people will sign up to offset the more costly sick patients.
The corporate tax rate gets the biggest cut in the GOP compromise bill, lowering the rate to 20 percent from 35 percent.
The Estate Tax, colloquially termed the Death Tax by opponents, will be repealed after six years under the new tax reform, and the exemption will be doubled in the meantime.The GOP said that businesses and family-owned farms “will no longer have to worry about double or triple taxation from Washington when they pass down their life’s work to the next generation.”
The home mortgage interest deduction is kept for current mortgages and will also be available to new home buyers paying up to $500,000.
Senate Minority Leader Chuck Schumer (D-New York) reacted Friday by saying, “God bless wealthy people. I'm glad we have them, but they don't need a tax break. It's average middle class people and people struggling to get to the middle class who need those breaks.”
US Representative Richard Neal (D-Massachusetts) lamented how the bill was produced, saying the GOP's process kept Americans in the dark.
“One can only assume they were being this secretive because the bill raises taxes on millions of middle-class families while cutting corporations' taxes, explodes the deficit by roughly $2 trillion, strips health insurance from millions of Americans, and prompts billions of dollars of cuts to Medicare,” Neal wrote.
Moderate Republican Senator Susan Collins of Maine, who had been a holdout, now appears to be in support of the bill.
“I am pleased that the final tax reform bill includes all three of the amendments I authored, along with a number of provisions for which I strongly advocated, that will benefit lower- and middle-income families,” she said Friday.