Progress

With spines stiffened by a presidential pep talk, House Republicans easily approved a $1.4 trillion tax cut Thursday, taking the first big step toward a decades-overdue overhaul that the GOP hopes will send the economy soaring.

Desperate for a legislative win, Republicans linked arms and plowed ahead, brushing aside Democratic warnings that the bill will be seen as a sop to the wealthy instead of a boost to the middle class that President Trump had promised.

“America needs a comeback,” said House Majority Leader Kevin McCarthy, California Republican. “This is your comeback.”

Thursday’s 227-205 vote marks the first major step, but Republicans still have a number of hills to climb. The Senate is aiming to pass its own version after Thanksgiving, then the measures need to be squared with each other.

No Democrats backed the bill.

“This is the most irresponsible bill I will have been confronted with in 37 years,” said Rep. Steny H. Hoyer, a Maryland Democrat who said the massive deficits — as much as $2 trillion, when interest costs and other extensions are included — are a betrayed of what Republicans have long argued for.

Democrats said they could have supported a bill that cut taxes for those with middle incomes, but rejected any relief for the wealthy.

The bill actually doesn’t change the top tax rate of more than 39 percent, but raises the thresholds so it kicks in only at a higher income — more than $1 million for a married couple filing jointly. The bill then cuts the six other existing tax brackets down to three, and raises most of the income thresholds so Americans would see tax breaks.

A near-doubling of the standard deduction will help most taxpayers, and raising the per-child tax credit will help families, the GOP said.

On the business side, the corporate income tax rate will be lowered from 35 percent to 20 percent, taking it from the highest among major industrialized economies down below the global average.

And small businesses who pay taxes as personal income would see cuts as well, though the actual rates depend on a complex set of calculations.

The bill also eliminates the estate tax, leaving what’s estimated to be more than $170 billion in the hands of wealthy Americans.

House Minority Leader Nancy Pelosi quoted Catholic writings by St. Augustine in blasting the GOP’s plan, saying it was unjust.

“Our votes today will decide the future of the American middle class and those who aspire to it,” the California Democrat said, repeatedly calling the bill the “GOP tax scam.”

She pointed to analysis that found some Americans will end up worse off under the bill, because they’ll lose tax breaks for state and local tax deductions or student loan interest.

Republicans acknowledged instances where someone might have been claiming a number of breaks to lower their tax bill, but said nearly every family will save by eliminating the breaks but getting a lower rate.

“What we are doing here is determining the kind of country we’re going to have,” House Speaker Paul D. Ryan said, casting the bill a chance for the economy to finally escape the doldrums the economy has been trapped in the decade since the Wall Street collapse.

“Passing this bill is the single biggest thing we can do to grow the economy, to restore opportunity and help these middle-income families that are struggling,” he said.

Of the 1.4 trillion in total tax cuts, the House bill delivers more than 70 percent of that benefit to businesses in the form of the corporate and small business cuts.

Source…

(Visited 24 times, 5 visits today)