WASHINGTON: The Republican-controlled US House of
Representatives gave final approval on Wednesday to the biggest overhaul
of the US 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 per cent to 21pc was “probably the biggest
factor in this plan.” Trump planned a tax-related celebration with US
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 US corporate income tax rate to
21pc, gives other business owners a new 20pc 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 incentivise 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 pay cheque 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.
PILLAGING
Democrats have called the tax legislation 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,”
said House Democratic leader Nancy Pelosi.
A few
Republicans, whose party was once defined by its fiscal hawkishness,
have protested the deficit-spending encompassed in the bill. But most of
them have voted for it anyway, saying it would help businesses and
individuals, while boosting an already expanding economy they see as not
growing fast enough.
