House OKs GOP tax plan, with snag

Tuesday
Dec 19, 2017 at 10:48 PM Dec 19, 2017 at 10:51 PM

Senate expected to pass it late Tuesday; minor rule violations mean House must vote again Wednesday before sending bill to president

By Jeff Stein and Damian PalettaThe Washington Post

WASHINGTON — Republicans were on the verge of passing the most significant overhaul of the tax code since 1986, with the Senate preparing to pass the GOP plan late Tuesday night or early Wednesday morning and the House ready to send the measure to President Donald Trump.

The sprawling measure would cut the corporate tax rate dramatically, and the vast majority of households would see their income taxes go down in 2018, with the largest savings going to the wealthy. The bill also proposes revising nearly every part of the tax system by restructuring income tax rates and expanding some popular deductions while paring back others.

Republicans appear to have the votes they need to pass the measure through the Senate, after holdout Republican Sens. Marco Rubio, Fla., and Bob Corker, Tenn., said last week that they would support it.

"Congress is standing at the doorstep of a historic opportunity," Senate Majority Leader Mitch McConnell, R-Ky., said Tuesday as he announced the upcoming vote. "Here's what we set out to do: Take money out of Washington's pockets and put it back in the pockets of middle-class Americans."

House Republicans thought they had finished their work when they passed a version of the tax bill Tuesday afternoon. The measure passed 227 to 203, with all but 12 Republicans voting for the bill. No Democrats supported it.

But the plan hit a snag Tuesday afternoon when the Senate parliamentarian ruled that three of its provisions violated that chamber's Byrd Rule — guidelines on what types of legislation can pass with a simple 50-vote majority. Senate Republicans now aim to pass the measure with a series of minor revisions Tuesday night, with the House following Wednesday morning. None of the changes are expected to cost the plan any GOP support.

Despite the delay, Republicans celebrated the anticipated passage of their tax plan, which would be their first major legislative achievement since they took control of the government in January.

RHODE ISLAND DELEGATION

“Republicans just pulled off one of the biggest cons in the history of American politics. This job-killing bill gives companies even more incentive to ship American jobs overseas, said U.S. Rep. David Cicilline, D-R.I. "It lays the groundwork for devastating cuts to Medicare and Social Security. It robs working people in order to give even more money to the wealthy. And it will force the next generation to pay off more than $1 trillion in new deficit spending.

“The American people are going to see through this scam. Working men and women deserve real tax reform that begins with a tax cut for middle class families and promotes the creation of good-paying jobs. That’s what Democrats will deliver when we control the House again.”

“The Republican tax bill is a giveaway to the wealthy that ignores the needs of the majority of Americans and will actually raise taxes on tens of millions households," said U.S. Rep. Jim Langevin, D-R.I. "I have long said that we need reform to make the tax system simpler and fairer in a fiscally responsible manner. This Republican tax bill fails on all accounts. It will explode the national deficit to the tune of $1.5 trillion over the next decade. It adds needless complexity to the tax code with enormous new loopholes. And, in the end, it will give 83 percent of its benefits to the wealthiest one percent of Americans."

Trump has for months pushed Congress to send him a tax plan by Christmas and is expected to sign the measure at a ceremony shortly after it clears Congress.

"This is one of the most important pieces of legislation Congress has passed in decades. . . . For all those millions of Americans struggling paycheck to paycheck, help is on the way," House Speaker Paul Ryan, R-Wis., said after the House vote. "This is a good day for workers . . . and a great day for growth."

The legislation would affect nearly every American business and household.

The core of the plan is a massive and permanent cut to the corporate tax rate, dropping it from 35 percent to 21 percent.

The bill also would cut individual tax rates for all income tax levels. Families earning less than $25,000 a year would receive an average tax cut of $60, while those earning more than $733,000 would see an average cut of $51,000, according to the nonpartisan Tax Policy Center.

Many of the breaks for individuals are set to expire in the coming years.

Republicans set those expiration dates to comply with Senate limits on how much their legislation could add to the nation's deficit, and they say a future Congress will extend the cuts or make them permanent. But without that future intervention, the measure would raise taxes on 53 percent of Americans by 2027, according to the TPC's report.

The bill also restructures a complicated system of deductions. The standard deduction, taken by many middle- and low-income households, would double, and a child tax credit would be expanded. But other provisions that taxpayers use to reduce their bills, including a deduction on interest paid on new-home mortgages and a provision allowing Americans to deduct what they pay in state and local taxes, would be curtailed.

Of the 12 Republicans in the House who voted against the bill, 11 represent districts in New York, New Jersey or California. Those states are expected to be hit hard by the bill's reduction of the state and local tax deduction, which helps those in high-tax states.

"Many in my area could face higher taxes under this plan," Rep. Darrell Issa (R-Calif), one of the no votes, said in a statement before the vote. "Californians have entrusted me to fight for them. I will not make the incredible tax burden they already endure even worse."

Said Rep. Lee Zeldin, R-N.Y.: "This bill remains a geographic redistribution of wealth, taking extra money from a place like New York to pay for deeper tax cuts elsewhere. New York is a net contributor that now will be contributing even more."

The bill also would reduce the estate tax, a levy on inheritances paid only by the wealthiest estates. Under the bill, a couple could pass on up to $22 million in assets without their legatees having to pay the tax.

The bill also would void an Affordable Care Act requirement that nearly all Americans obtain some form of health coverage or pay a penalty. The change is projected to reduce government spending by $300 billion over a decade but also eventually leave 13 million more people with no health insurance.

The vote itself was chaotic, with a handful of activists sitting in the public gallery repeatedly interrupting Republicans as they introduced the tax measure. Several of them were escorted out by Capitol Police officers.

At one point, an activist yelled, "You are lying to yourselves!" and told House Republicans they needed to go back to school to learn math, which elicited laughter among the Democrats on the floor.

A woman in a wheelchair chanted, "Shame! Shame!" as she was removed from the gallery.

Nearby sat Treasury Secretary Steven Mnuchin and a handful of his staff members, who also watched the proceedings from the public gallery. The Republican caucus rose in near unanimous applause after the final vote was counted, then went to congratulate Ryan and House Ways and Means Committee Chairman Kevin Brady, R-Texas, with smiles and pats on the back.

Republicans have touted their bill as a middle-class tax cut and have promised that it will produce enough economic growth to boost hiring and workers' wages, and create enough revenue to keep it from enlarging the deficit.

In an analysis of an earlier version of the bill, the Joint Committee on Taxation, Congress's official tax scorekeeper, projected that the bill would add $1 trillion to the deficit over a decade, even when projected economic growth is taken into account. That figure would grow substantially if the individual tax cuts were extended, and Republicans predict that they will be.

Democrats unanimously oppose the plan but lack the votes to block it in either chamber. The sidelined minority's members have spent months bashing the plan as a giveaway to corporations and the wealthy.

Polling suggests that the public is broadly skeptical of the plan. A CNN poll released Tuesday found that only 33 percent of Americans support it, with 66 percent of the country thinking it does more for the wealthy than for the middle class.

Tuesday
Dec 19, 2017 at 10:48 PM Dec 19, 2017 at 10:51 PM

Senate expected to pass it late Tuesday; minor rule violations mean House must vote again Wednesday before sending bill to president

By Jeff Stein and Damian PalettaThe Washington Post

WASHINGTON — Republicans were on the verge of passing the most significant overhaul of the tax code since 1986, with the Senate preparing to pass the GOP plan late Tuesday night or early Wednesday morning and the House ready to send the measure to President Donald Trump.

The sprawling measure would cut the corporate tax rate dramatically, and the vast majority of households would see their income taxes go down in 2018, with the largest savings going to the wealthy. The bill also proposes revising nearly every part of the tax system by restructuring income tax rates and expanding some popular deductions while paring back others.

Republicans appear to have the votes they need to pass the measure through the Senate, after holdout Republican Sens. Marco Rubio, Fla., and Bob Corker, Tenn., said last week that they would support it.

"Congress is standing at the doorstep of a historic opportunity," Senate Majority Leader Mitch McConnell, R-Ky., said Tuesday as he announced the upcoming vote. "Here's what we set out to do: Take money out of Washington's pockets and put it back in the pockets of middle-class Americans."

House Republicans thought they had finished their work when they passed a version of the tax bill Tuesday afternoon. The measure passed 227 to 203, with all but 12 Republicans voting for the bill. No Democrats supported it.

But the plan hit a snag Tuesday afternoon when the Senate parliamentarian ruled that three of its provisions violated that chamber's Byrd Rule — guidelines on what types of legislation can pass with a simple 50-vote majority. Senate Republicans now aim to pass the measure with a series of minor revisions Tuesday night, with the House following Wednesday morning. None of the changes are expected to cost the plan any GOP support.

Despite the delay, Republicans celebrated the anticipated passage of their tax plan, which would be their first major legislative achievement since they took control of the government in January.

RHODE ISLAND DELEGATION

“Republicans just pulled off one of the biggest cons in the history of American politics. This job-killing bill gives companies even more incentive to ship American jobs overseas, said U.S. Rep. David Cicilline, D-R.I. "It lays the groundwork for devastating cuts to Medicare and Social Security. It robs working people in order to give even more money to the wealthy. And it will force the next generation to pay off more than $1 trillion in new deficit spending.

“The American people are going to see through this scam. Working men and women deserve real tax reform that begins with a tax cut for middle class families and promotes the creation of good-paying jobs. That’s what Democrats will deliver when we control the House again.”

“The Republican tax bill is a giveaway to the wealthy that ignores the needs of the majority of Americans and will actually raise taxes on tens of millions households," said U.S. Rep. Jim Langevin, D-R.I. "I have long said that we need reform to make the tax system simpler and fairer in a fiscally responsible manner. This Republican tax bill fails on all accounts. It will explode the national deficit to the tune of $1.5 trillion over the next decade. It adds needless complexity to the tax code with enormous new loopholes. And, in the end, it will give 83 percent of its benefits to the wealthiest one percent of Americans."

Trump has for months pushed Congress to send him a tax plan by Christmas and is expected to sign the measure at a ceremony shortly after it clears Congress.

"This is one of the most important pieces of legislation Congress has passed in decades. . . . For all those millions of Americans struggling paycheck to paycheck, help is on the way," House Speaker Paul Ryan, R-Wis., said after the House vote. "This is a good day for workers . . . and a great day for growth."

The legislation would affect nearly every American business and household.

The core of the plan is a massive and permanent cut to the corporate tax rate, dropping it from 35 percent to 21 percent.

The bill also would cut individual tax rates for all income tax levels. Families earning less than $25,000 a year would receive an average tax cut of $60, while those earning more than $733,000 would see an average cut of $51,000, according to the nonpartisan Tax Policy Center.

Many of the breaks for individuals are set to expire in the coming years.

Republicans set those expiration dates to comply with Senate limits on how much their legislation could add to the nation's deficit, and they say a future Congress will extend the cuts or make them permanent. But without that future intervention, the measure would raise taxes on 53 percent of Americans by 2027, according to the TPC's report.

The bill also restructures a complicated system of deductions. The standard deduction, taken by many middle- and low-income households, would double, and a child tax credit would be expanded. But other provisions that taxpayers use to reduce their bills, including a deduction on interest paid on new-home mortgages and a provision allowing Americans to deduct what they pay in state and local taxes, would be curtailed.

Of the 12 Republicans in the House who voted against the bill, 11 represent districts in New York, New Jersey or California. Those states are expected to be hit hard by the bill's reduction of the state and local tax deduction, which helps those in high-tax states.

"Many in my area could face higher taxes under this plan," Rep. Darrell Issa (R-Calif), one of the no votes, said in a statement before the vote. "Californians have entrusted me to fight for them. I will not make the incredible tax burden they already endure even worse."

Said Rep. Lee Zeldin, R-N.Y.: "This bill remains a geographic redistribution of wealth, taking extra money from a place like New York to pay for deeper tax cuts elsewhere. New York is a net contributor that now will be contributing even more."

The bill also would reduce the estate tax, a levy on inheritances paid only by the wealthiest estates. Under the bill, a couple could pass on up to $22 million in assets without their legatees having to pay the tax.

The bill also would void an Affordable Care Act requirement that nearly all Americans obtain some form of health coverage or pay a penalty. The change is projected to reduce government spending by $300 billion over a decade but also eventually leave 13 million more people with no health insurance.

The vote itself was chaotic, with a handful of activists sitting in the public gallery repeatedly interrupting Republicans as they introduced the tax measure. Several of them were escorted out by Capitol Police officers.

At one point, an activist yelled, "You are lying to yourselves!" and told House Republicans they needed to go back to school to learn math, which elicited laughter among the Democrats on the floor.

A woman in a wheelchair chanted, "Shame! Shame!" as she was removed from the gallery.

Nearby sat Treasury Secretary Steven Mnuchin and a handful of his staff members, who also watched the proceedings from the public gallery. The Republican caucus rose in near unanimous applause after the final vote was counted, then went to congratulate Ryan and House Ways and Means Committee Chairman Kevin Brady, R-Texas, with smiles and pats on the back.

Republicans have touted their bill as a middle-class tax cut and have promised that it will produce enough economic growth to boost hiring and workers' wages, and create enough revenue to keep it from enlarging the deficit.

In an analysis of an earlier version of the bill, the Joint Committee on Taxation, Congress's official tax scorekeeper, projected that the bill would add $1 trillion to the deficit over a decade, even when projected economic growth is taken into account. That figure would grow substantially if the individual tax cuts were extended, and Republicans predict that they will be.

Democrats unanimously oppose the plan but lack the votes to block it in either chamber. The sidelined minority's members have spent months bashing the plan as a giveaway to corporations and the wealthy.

Polling suggests that the public is broadly skeptical of the plan. A CNN poll released Tuesday found that only 33 percent of Americans support it, with 66 percent of the country thinking it does more for the wealthy than for the middle class.

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