House Passes Tax Cuts and Jobs Act | What’s Next for the GOP Tax Plan?

congress-house-tax-cuts-jobs-actOn Thursday, the House approved the Tax Cuts and Jobs Act with a vote of 227-205. The bill passed along party lines, with no Democrats voting in support of it.

The Tax Cuts and Jobs Act aims to simplify taxes for Americans, reducing the country’s seven tax brackets down to four. According to House Speaker Paul Ryan, the bill would save the average American household $1,182 per year on their taxes. If passed by Senate, the $1.5 trillion tax bill will result in the creation of 890,000 new jobs.

House Republicans have lauded the bill’s future impact, claiming that 90% of Americans “will be able to file their taxes on a postcard-sized form.” Additionally, the Tax Cuts and Jobs Act would reduce the corporate tax rate from 35% to 20%, promoting economic growth and bringing jobs back to the United States.

President Trump appeared on Capitol Hill encouraging Republican lawmakers to support the bill. “Taxes are going really well”, he told reporters.

With GOP leaders aiming to approve a final tax bill by the end of the year, all eyes are focused on the Senate. Senate Republicans have introduced their own version of a tax overhaul in recent days, with several differences from the House version– including keeping more tax brackets, reducing individual tax rates, retaining the estate tax at double the allotted exemption, and phasing in a corporate tax cut over several years. .

Most importantly, the Senate version of the bill also repeals the individual mandate put in place by the Affordable Care Act. Senate Majority Leader Mitch McConnell explained that including the individual mandate repeal in the tax overhaul bill would garner support from Republican members as they aim to mitigate the harmful effects the tax has on lower income and middle income families.,

We’re optimistic that inserting the individual mandate repeal would be helpful,” McConnell said.

The Joint Committee on Taxation has released a preliminary report of the distribution effects of the bill, which can be read here.

“Passing this bill is the single biggest thing we can do to grow the economy, to restore opportunity and help those middle-income families who are struggling,” House Speaker Paul Ryan said in a recent statement.

Some Republicans are skeptical of the bill, including Senator Susan Collins (R-ME). As a more moderate Republican, Collins has expressed concerns that the repeal of the individual mandate was an unwise decision. “I personally think it complicates tax reform to put the repeal of the individual mandate in there,” Collins explained, worrying that the alteration would only end up increasing health care premiums for many Americans.

Democrats across the board have been highly critical of the bill since it was first introduced, calling it a scam and claiming it will only harm the middle class while serving corporations and big businesses.

“Now the ball is in the Senate’s court,” Vice President Mike Pence said after the House vote, “the next few weeks are going to be vitally important and they’re going to be a challenge.”

Early Friday morning, President Trump tweeted, “If Democrats were not such obstructionists and understood the power of lower taxes, we would be able to get many of their ideas into Bill”.

The president later tweeted, “If we get Tax Cuts and Reform, we’ll really see some great results.”

The bill is expected to be considered on the Senate floor the week after the Thanksgiving recess.

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