The House has passed a tax bill that will afford permanent breaks to corporations, temporary respite to individuals, and repeals the Affordable Care Act mandate. The measure is on track to become law before Friday’s deadline.
The Tax Cuts and Jobs Act (TCJA) will now be sent to the Senate. If approved, it will be ready for President Donald Trump to sign Friday, representing the first tax overhaul since 1986. Lawmakers are rushing to pass the bill before the self-imposed deadline of the end of 2017.
The final tally was 227 votes in favor and 203 opposed, with 12 Republicans joining the Democrats in opposing the bill and two Democrats not voting.
Protesters briefly interrupted the proceedings, chanting "kill the bill!" right before Speaker of the House Paul Ryan (R-Wisconsin) made his speech on the House floor. They were removed from the gallery by the sergeant-at-arms.
The biggest beneficiaries of the new tax plan are corporations, whose tax rate will decrease from 35 percent to 21 percent. The bill also repeals the corporate alternative minimum tax which ensured that companies that turn a profit pay at least some federal taxes.
So-called pass-through businesses – companies organized as S-corporations, Limited liability corporations (LLC), sole proprietorships and partnerships, will be taxed at the individual rate of 20 percent rather than at the corporate tax rate.
On the individual end, Americans will be taxed within seven different brackets: Zero, 10, 12, 22, 24, 32, 35 and 37 percent. High-income Americans will continue to pay 39.6 percent income tax. Unlike the corporate tax cuts, individual tax provisions will return to their current rates in ten years, unless extended by Congress.
The tax bill will also eliminate the penalty for not purchasing health insurance as articulated in the Affordable Care Act – better known as Obamacare. GOP lawmakers failed to repeal Obamacare earlier this year. Democrats say the move will raise premiums and make millions of Americans lose health insurance as a result.
The proposal would also allow drilling in Alaska’s Arctic National Wildlife Refuge, the largest area of pristine wilderness in the US which oil and gas companies have long sought to drill.
Millions of victims of wildfires, hurricanes and floods that devastated the country would have one less resource as the Tax Cuts and Jobs Act would eliminate a deduction for uninsured casualty losses from natural disasters.
GOP holdouts, Senators Susan Collins (R-Maine), Mike Lee (R-Utah), and Marco Rubio (R-Florida) announced they will vote in favor, after securing concessions from fellow lawmakers. Senator Jeff Flake (R-Arizona) is the lone holdout, though his opposition is not expected to prevent the passage of the proposed legislation in the Senate.
“Just finished reading the final Tax Cuts and Jobs Act. It will cut taxes for working Utah families. I will proudly vote for it,” Lee wrote.
Speaker Ryan was not concerned about the bill’s unpopularity. The “mudfest” on television makes it unpopular, he said, but when people see the tax plan’s results, it will gain public support.
Senator Bernie Sanders (I-Vermont) has opposed the bill, saying it represented a giveaway to corporations without benefiting the majority of Americans. “This is a tax bill written for massive corporations and wealthy Republican campaign contributors, not for the average American. It must be defeated.”