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. Trump had emphasized a tax cut for middle-class Americans during his 2016 campaign. At the beginning of a Cabinet meeting on Wednesday he said 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 the air. 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.
The debt-financed legislation cuts the U.S. corporate income tax rate to 21 percent, 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 repeals the key portion of the Obamacare health system that fined people who did not have healthcare insurance. "We have essentially repealed Obamacare and we'll come up with something that will be much better," Trump said on Wednesday. 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.
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