White House: “…the House of Representatives voted for final passage on the Tax Cuts and Jobs Act. That brings us one step closer to the President making good on his promise to deliver tax cuts for Christmas.”–White House, New York Times New York[RR]Washington-DC–According to New York Times and White House, “”…the House of Representatives voted […]
White House: “…the House of Representatives voted for final passage on the Tax Cuts and Jobs Act. That brings us one step closer to the President making good on his promise to deliver tax cuts for Christmas.”–White House, New York Times
New York[RR]Washington-DC–According to New York Times and White House, “”…the House of Representatives voted for final passage on the Tax Cuts and Jobs Act. That brings us one step closer to the President making good on his promise to deliver tax cuts for Christmas.”–White House.
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• The House approved the most sweeping tax rewrite in decades along party lines, with lawmakers voting 227-203 in support.
• The House will have to vote again after the Senate parliamentarian rejected three provisions in the Senate bill. Both chambers must pass identical bills.
• President Trump is expected to sign the bill into law soon after the final votes.
Clearing the final major hurdle for a decades-long goal, Republicans mustered enough support in the Senate to approve a sweeping tax plan. The vote, along party lines, was 51-48. Senator John McCain, Republican of Arizona, was the only one who was not present, as he returned home to receive medical treatment.
As senators cast their final votes on the bill, with Vice President Mike Pence presiding, protesters rose in the gallery of the chamber and began chanting, “Kill the bill, don’t kill us.” They begged Republicans not to take away their health care and were escorted out.
The vote came after hours of debate, during which Democrats raised strenuous objections about the bill’s cuts for corporations and wealthier Americans.
As the final vote approached in the Senate, Senator Chuck Schumer of New York, the Democratic leader, gave his closing argument against the bill and scolded his Republican colleagues for talking during his remarks on the floor.
“This is serious stuff,” Mr. Schumer said. “We believe you’re messing up America. You could pay attention for a couple of minutes.”
On the Senate floor, Treasury Secretary Steven Mnuchin observed the proceedings, while Republicans and Democrats mingled among themselves. Senators Susan Collins of Maine and Jeff Flake of Arizona laughed as they spoke to each other, while shouting activists implored them to change their minds and vote the legislation down.
“I think this is an important accomplishment for the country that people will value and appreciate,” Senator Mitch McConnell of Kentucky, the majority leader, said at a news conference after the vote.
The House on Tuesday approved the most sweeping tax overhaul in decades, voting along party lines to enact deep and permanent tax cuts for corporations and temporary cuts for individuals.
The vote puts Republicans closer to final passage of the $1.5 trillion tax cut as the Senate prepares to vote on the final bill.
However, the Senate parliamentarian has rejected three provisions from the Senate bill, saying they violate the so-called Byrd rule. This means the House will have to vote again on the revised bill since both chambers must pass identical bills.
Republicans hit a last-minute speed bump in their supercharged effort to pass a tax bill on Tuesday when the Senate parliamentarian advised that three provisions in the bill ran afoul of Senate rules.
The Democratic minority in the Senate said three components of the bill were at issue: a provision expanding the use of 529 savings accounts for K-12 expenses, a provision regarding the title of the bill, and part of the criteria for whether colleges and universities are subject to an excise tax that the bill imposes on investment income.
The Senate’s so-called Byrd rule is complicated, but a key question is whether provisions are fiscal in nature. Legislative changes with no budgetary impact are not allowed in reconciliation bills. Items that have a nominal budget impact, but are mostly there for policy reasons, are also supposed to be struck, though that’s a more subjective standard. Here’s a refresher for those interested in the so-called Byrd bath.
The 529 expansion was proposed by Senator Ted Cruz, Republican of Texas, whose amendment during debate on the original Senate bill required a tiebreaking vote by Vice President Mike Pence.
The parliamentary stumble does not imperil the overall tax rewrite, but the House will now need to vote again on the tax bill after the Senate gives its approval. The extra House vote is expected to take place on Wednesday.
Republicans are passing the tax overhaul using special budget rules that shield the bill from a Democratic filibuster in the Senate. But in doing so, they face restrictions on the contents of the bill.
Senator Patrick J. Toomey, Republican of Pennsylvania, said the ruling would not change the bill’s trajectory in the Senate.
“If we lose on any of them, none are large enough to jeopardize the standing of the overall bill,” he said.
Lacking the votes to stop the Republican tax bill, some Senate Democrats resorted to trolling their colleagues across the aisle.
After the Senate parliamentarian ruled against the name of the tax bill — The Tax Cuts and Jobs Act — on the basis that it did not influence spending or revenue, Senator Bob Menendez and some of his fellow Democrats snapped up the name to sponsor their own bill.
The new Tax Cuts and Jobs Act would restore the state and local tax deduction, which Republicans are repealing, with some exceptions, in their legislation.
Mr. Menendez said in a statement that he would consider giving the name back to the Republicans on one condition.
“As soon as they come up with a bill that actually cuts taxes for the middle class and creates jobs, they can have it back,” he said.
House Speaker Paul D. Ryan of Wisconsin, speaking on the House floor, called the vote “a turning point” saying “this is our chance, this is our moment.” When the bill passed the House, a giddy Mr. Ryan smiled broadly and banged the gavel with force as he declared victory.
Passage of the bill came over the strenuous objections of Democrats in both the House and the Senate, who have accused Republicans of giving a gift to corporations and the wealthy and driving up the federal debt in the process. The final vote tally can be found here.
Twelve House Republicans also voted no on the bill, including lawmakers from high-tax states like New York, New Jersey and California.
Under the bill approved by the House, the corporate tax rate would be cut to 21 percent, from the current 35 percent, a move that Republicans are betting will increase economic growth. Individuals would also see tax cuts, including a top rate of 37 percent, down from 39.6 percent. But the individual tax cuts would expire after 2025, a step that Republicans took to comply with budget rules that allow them to pass the tax overhaul using a simple majority, and without Democratic votes.
Republicans in Congress moved with remarkable speed to enact the biggest tax overhaul since 1986, unveiling legislation to rewrite the tax code, marshaling support for their effort and devising a compromise between the House and Senate in under two months.
Their success was a stark contrast with their effort this year to repeal and replace the Affordable Care Act, a quest that was encumbered by internal divisions among Republicans and ultimately ended in humiliating failure. And it gives Mr. Trump a big accomplishment as the first year of his presidency nears an end.
Sarah Huckabee Sanders, in a celebratory mood, told reporters at her briefing that the House vote put President Trump one step closer to delivering “tax cuts for Christmas.”
She again said that the president would not release his tax returns, the only way that experts can determine precisely how the tax bill would impact his personal finances. The tax package, on the surface, appears hugely beneficial to the Trump family. It continues many favorable tax preferences for commercial real estate that were curtailed for other industries, cuts the top income tax rate from 39.6 percent to 37 percent, and doubles the inheritance that Mr. Trump’s children can shield from taxation, to $22 million.
Capitol Police escorted a whole row of protesters out of the House chamber during the debate. Protesters yelled, “kill the bill, don’t kill us” and “shame, shame, shame.” Two additional protesters piped up during Speaker Paul D. Ryan’s speech, one questioning his ability to do math.
Senator Bob Corker of Tennessee told The New York Times that he faced a “tough” decision in backing a tax bill that is projected to add to the deficit.
Mr. Corker had initially said he would oppose the final bill, then decided the $1.5 trillion tax cut was better for the nation than doing nothing at all.
“It’s been really tough, especially because I did think, I really felt like we could have had a bipartisan bill that would have really withstood more fully the test of time,” Mr. Corker said.
Still, theories about his switch continue to percolate. Some suggested Mr. Corker, who has said that he will not seek re-election to the Senate, may be rethinking his political future, while others asserted that he was bought off by a late-added provision that would benefit people with large real estate holdings, including him.
In an interview on Monday, Mr. Corker dismissed those theories and said he faced a wrenching decision as a Republican lawmaker with deep concerns about the country’s mounting debt and a strong desire to overhaul the tax code. In the end, he said, he put his fiscal principles aside on the assumption that the nation would be better off with the tax cuts than without.
Republicans might be preparing to celebrate the passage of their tax bill, but everyday taxpayers are not popping the champagne bottles just yet.
A new poll from CNN and SSRS found that the tax legislation continues to be unpopular with the general public, with 55 percent opposing the proposals and 33 percent supporting them. Opposition to the bill has jumped by 10 percentage points since early November.
More people think they will be worse off after the tax bill is signed into law, and a majority of people think the tax cuts will favor the rich rather than the middle class.
The survey, conducted from Thursday to Sunday, queried 1,001 adults by landline and cellphone.
Mr. Ryan dismissed polling that suggests the tax bill is unpopular and attributed skepticism about the legislation to pundits spreading untruths on television.
He said that he was confident that once taxpayers saw more money in their paychecks and enjoyed the benefits of a simpler tax filing system, they would learn to appreciate the merits of the tax bill.
“Results are going to make this popular,” Mr. Ryan said at his weekly news conference.
Not all conservatives are jumping for joy over the prospect of tax cuts for Christmas.
The Club for Growth said on Tuesday that the $1.5 trillion tax bill Republicans are poised to sign “falls short of pro-growth expectations.”
The group wants Republicans to try again next year with a focus of lowering taxes for pass-through businesses, eliminating the estate tax completely, fully repealing the alternative minimum tax and getting rid of the rest of the Affordable Care Act’s taxes.
“There’s no reason we have to wait another 30 years to enact additional reform,” said David McIntosh, president of the Club for Growth.
The final House bill passed without support from 12 Republicans, all of whom also voted against the original House bill. Those voting no on Tuesday included 11 Republicans from the high-tax states of California, New York and New Jersey, where constituents could see their taxes go up because of a cap to the state and local tax deduction, known as SALT. The Senate and House bills both capped SALT at $10,000 and restricted it to deducting property taxes only.
The final tax bill still contains a cap of $10,000 but allows individuals to use that deduction for property taxes as well either income or sales taxes. But the change was not enough to win over many of the Republicans who voted against the House bill given they could be vulnerable to losing their seats if constituents feel a pinch from higher taxes.
The list of House Republicans who voted no on the bill includes:
New York Representatives Lee Zeldin, Peter T. King, Dan Donovan, John J. Faso and Elise Stefanik.
New Jersey Representatives Frank A. LoBiondo, Christopher H. Smith, Leonard Lance and Rodney Frelinghuysen.
California Representatives Darrell Issa and Dana Rohrabacher.
North Carolina Representative Walter B. Jones.
The only Republican to change from a no vote to a yes vote was Representative Tom McClintock of California.
The final tax bill would reduce taxes on average by about $1,600 in 2018, increasing after-tax incomes 2.2 percent, with the largest benefit going to the wealthiest households, a new analysis finds.
The Tax Policy Center, which analyzed the final bill, said taxpayers in the bottom quintile, with less than $25,000 in income, would get an average tax cut of $60, or 0.4 percent of after tax income.
Those in the middle income quintile — earning between about $49,000 and $86,000 — would receive an average tax cut of about $900, or 1.6 percent of after-tax income. Those earning between $86,000 and $149,000 would see an average tax cut of $1,800 or 1.9 percent of after-tax income. Taxpayers with income between about $308,000 and $733,000, would see an average tax cut of about $13,500 or 4.1 percent of after-tax income.
Taxpayers in the top 1 percent of the income distribution (those with income more than $733,000) would receive an average cut of $51,000, or 3.4 percent of after-tax income.
While the bill has changed several times since it originally was introduced in the House and Senate, the basic financial impact remains the same, writes Howard Gleckman, a senior fellow at the Tax Policy Center.
“Most households would get a tax cut at first, with the biggest benefits going to those with the highest incomes. After 2025, when nearly all of the bill’s individual income tax provisions are due to expire, only high-income people would get a meaningful tax cut,” Mr. Gleckman writes.
Credit: New York Times