WASHINGTON: The US Senate approved a sweeping tax overhaul on Saturday, moving Republicans and President Donald Trump a major step closer to their goal of slashing taxes for businesses and the rich while offering everyday Americans a mixed bag of changes.

Trump hailed on Saturday the tax cut bill passed by the Senate overnight. In an early morning Twitter post, Trump called his bill the biggest tax cut in US history and said his Republican Party would now work with the House of Representatives, which has passed its own tax bill, to produce a common version.

“Thank you to House and Senate Republicans for your hard work and commitment!” Trump wrote.

After a marathon session that stretched into the night, the chamber voted 51 to 49 in favour of the country’s largest tax overhaul in 31 years, overcoming stubborn internal Republican resistance and dismissing angry criticism from Democrats over last-minute revisions to the bill.

The Senate version and the one passed recently by the House must now be reconciled into a single bill, and approved again by both chambers, before it can be signed into law.

Both versions lower the corporate tax rate to 20 per cent from 35 per cent, and include more modest tax cuts aimed at individuals across all income levels.

In what would be the largest US tax overhaul since the 1980s, Republicans want to add $1.4 trillion over 10 years to the $20 trillion national debt to finance changes that they say would further boost an already growing economy.

US stock markets have rallied for months in hopes Washington would provide significant tax cuts for corporations.

Following the 51-49 vote, talks will begin, likely next week, between the Senate and the House of Representatives, which has already approved its own tax bill. The two chambers must craft a single bill to send to Trump to sign into law.

Trump wants that to happen before the end of the year, allowing him and his Republicans to score their first major legislative achievement of 2017, despite controlling the White House, the Senate and the House since he took office in January.

Celebrating their victory, Republican leaders said the tax cuts would encourage US companies to invest more and boost economic growth.

“We have an opportunity now to make America more competitive, to keep jobs from being shipped offshore and to provide substantial relief to the middle class,” said Mitch McConnell, the Republican leader in the Senate.

The tax overhaul is seen by Republicans as crucial to their prospects in the November 2018 mid-term election campaigns when they will have to defend their majorities in Congress.

In a legislative battle that moved so fast a final draft of the bill was unavailable to the public until just hours before the vote, Democrats slammed the measure as a give-away to businesses and the rich financed with billions in taxpayer debt.

The framework for both the Senate and House bills was developed in secret over a few months by a half-dozen Republican congressional leaders and Trump advisers, with little input from the party’s rank-and-file and none from Democrats. The Senate approved their bill in the wee hours, with Democrats complaining that last-minute amendments circulated among senators were poorly drafted and vulnerable to being gamed later by lawyers and accountants in the tax avoidance industry.

“The Republicans have managed to take a bad bill and make it worse,” said Senate Democratic leader Chuck Schumer. “Under the cover of darkness and with the aid of haste, a flurry of last-minute changes will stuff even more money into the pockets of the wealthy and the biggest corporations.” No Democrats voted for the bill, but they lacked the votes to block it because Republicans hold a 52-48 Senate majority.

Republican Senator Bill Cassidy praised the bill and said, “Working families and middle-income families across the nation will be better off. Families who over the last eight years have not done well will begin to do better.”

Six Republican senators, who wanted and got last-minute amendments and whose votes had been in doubt, said on Friday they would back the bill and did so.

Senator Bob Corker, one of few remaining Republican fiscal hawks who pledged early on to oppose any bill that expanded the federal deficit, stood out as the lone Republican dissenter.

“I am not able to cast aside my fiscal concerns and vote for legislation that... could deepen the debt burden on future generations,” said Corker, who is not running for re-election.

Agence France-Presse