The Republican-controlled U.S.
House of Representatives gave final approval on Wednesday to the biggest
overhaul of the U.S. tax code in 30 years, sending a sweeping $1.5 trillion
bill to President Donald Trump for his signature.
In sealing Trump’s first major
legislative victory, Republicans steamrolled opposition from Democrats to pass
a bill that slashes taxes for corporations and the wealthy while giving mixed,
temporary tax relief to middle-class Americans.
The House approved the measure,
224-201, passing it for the second time in two days after a procedural foul-up
forced another vote on Wednesday. The Senate had passed it 51-48 in the early
hours of Wednesday.
“By cutting taxes and reforming
the broken system, we are now pouring rocket fuel into the engine of our
economy,” Trump said in a statement after the vote.
Trump, who had emphasized a tax
cut for middle-class Americans during his 2016 campaign, said at the start of a
Cabinet meeting before the vote that lowering the corporate tax rate from 35
percent to 21 percent was “probably the biggest factor in this plan.”
Trump planned a tax-related
celebration with U.S. lawmakers at the White House in the afternoon but will
not sign the legislation immediately. The timing of the signing was still up in
After Trump repeatedly urged
Republicans to get it to him to sign before the end of the year, White House
economic adviser Gary Cohn said the timing of signing the bill depends on
whether automatic spending cuts triggered by the legislation could be waived.
If so, the president will sign it before the end of the year, he said.
In addition to cutting the U.S.
corporate income tax rate to 21 percent, the debt-financed legislation gives
other business owners a new 20 percent deduction on business income and
reshapes how the government taxes multinational corporations along the lines
the country’s largest businesses have recommended for years.
Millions of Americans would stop
itemizing deductions under the bill, putting tax breaks that incentivize home
ownership and charitable donations out of their reach, but also making tax
returns somewhat simpler and shorter.
The bill keeps the present number
of tax brackets but adjusts many of the rates and income levels for each one.
The top tax rate for high earners is reduced. The estate tax on inheritances is
changed so far fewer people will pay.
Once signed, taxpayers likely
would see the first changes to their paycheck tax withholdings in February.
Most households will not see the full effect of the tax plan on their income
until they file their 2018 taxes in early 2019.
In two provisions added to secure
needed Republican votes, the legislation also allows oil drilling in Alaska’s
Arctic National Wildlife Refuge and removes a tax penalty under the Obamacare
health law for Americans who do not obtain health insurance
“We have essentially repealed
Obamacare and we’ll come up with something that will be much better,” Trump
said on Wednesday.
Democrats were united in
opposition to the tax legislation, calling it a giveaway to the wealthy that
will widen the income gap between rich and poor, while adding $1.5 trillion
over the next decade to the $20 trillion national debt, which Trump promised in
2016 he would eliminate as president.
“Today the Republicans take their
victory lap for successfully pillaging the American middle class to benefit the
powerful and the privileged,” House Democratic leader Nancy Pelosi said.
A few Republicans, a party once
defined by fiscal hawkishness, have protested the deficit-spending encompassed
in the bill. But most voted for it anyway, saying it would help businesses and
individuals while boosting an already expanding economy they see as not growing
In the House, 12 Republicans
voted against the tax bill. All but one, Walter Jones of North Carolina, were
from the high-tax states of New York, New Jersey and California, which will be
hit by the bill’s cap on deductions for state and local taxes.
Despite Trump administration
promises that the tax overhaul would focus on the middle class and not cut
taxes for the rich, the nonpartisan Tax Policy Center, a think tank in
Washington, estimated middle-income households would see an average tax cut of
$900 next year under the bill, while the wealthiest 1 percent of Americans
would see an average cut of $51,000.
The House was forced to vote
again after the Senate parliamentarian ruled three minor provisions violated
arcane Senate rules. To proceed, the Senate deleted the three provisions and
then approved the bill.
Because the House and Senate must
approve the same legislation before Trump can sign it into law, the Senate’s
late Tuesday vote sent the bill back to the House.
Democrats complained the bill was
a product of a hurried, often secretive process that ignored them and much of
the Republican rank-and-file. No public hearings were held and numerous narrow
amendments favored by lobbyists were added late in the process, tilting the
package more toward businesses and the wealthy.
U.S. House Speaker Paul Ryan
defended the bill in television interviews on Wednesday morning, saying support
would grow for after it passes and Americans felt relief.
“I think minds are going to
change,” Ryan said on ABC’s “Good Morning America” program.