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 steam-rolled 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.
“By cutting taxes and reforming the broken system, we are now pouring rocket fuel into the engine of our economy,” Trump said in a statement after the vote.
Trump, who had emphasised a tax cut for middle-class Americans during his 2016 campaign, said at the start of a Cabinet meeting before the vote that lowering the corporate tax rate from 35 per cent to 21 per cent 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.
BUSINESS FRIENDLY: In addition to cutting the US corporate income tax rate to 21 per cent, the debt-financed legislation gives other business owners a new 20 per cent 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 itemising 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 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 removes a tax penalty under the Obamacare health law for Americans who do not obtain health insurance — Reuters
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