A U.S. tax overhaul passed in the House of Representatives on Tuesday, setting the stage for a final Senate vote expected to give President Donald Trump his first major legislative victory and trigger far-reaching consequences for the U.S. and global economy.
The Tax Cuts and Jobs Act was approved 227 to 203, with nearly all Republicans voting in favor and all Democrats opposed. If enacted, the bill permanently slashes corporate taxes, temporarily cuts taxes paid by American wage and salary earners, caps some popular tax deductions, and hikes the U.S. national debt by at least $1 trillion over a decade.
Republicans argued tax cuts will supercharge the U.S. economy and make American businesses more competitive at home and abroad.
“Biggest Tax Cuts and Reform EVER,” Trump tweeted ahead of the House vote. “Enjoy, and create many beautiful JOBS!”
“We have labored for too long behind the rest of the world,” said Pennsylvania Rep. Mike Kelly. “Corporations will stay [in the United States]. They will make investments in land and bricks and mortar, equipment, education and making our workers the best workers in the world and able to compete anywhere and win.”
Democrats slammed the bill as mortgaging America’s future in order to line the pockets of the wealthy.
“Instead of being a tax break for middle class Americans, it’s a tax scam that will force hardworking moms and dads to pay the bill for tax giveaways to the rich and well-connected,” Illinois Democratic Rep. Robin Kelly said. “That is just wrong.”
“For years I’ve heard members of the majority [Republicans] come to the floor talking about the need to address the national debt,” said Democratic Rep. Louise Slaughter of New York. “This bill explodes the deficit by $1.5 trillion.”
The non-partisan Tax Policy Center concluded the bill would cut taxes for 95 percent of Americans next year, but average cuts for top earners would greatly exceed reductions for people earning less.
The legislation also partially repeals former President Barack Obama’s signature health care law, eliminating the requirement that Americans purchase health care insurance.
Republicans said a multitude of benefits will flow from the tax bill, including the repatriation of trillions of dollars held by U.S. corporations oversees and a deluge of private investment that would create jobs and raise wages across America.
“Is it good to bring back investment and offshore income here? Yes,” Rep. Greg Walden of Oregon said. “That creates really good paying jobs.”
Democrats disputed the rosy predictions and focused on the tax bill’s generous provisions for wealthy landowners and investors, including President Trump.
“How many millions of dollars the Trump family will personally stuff in their pockets cannot be precisely determined,” Texas Democratic Rep. Lloyd Doggett said.
Trump has said he expects to be worse off financially, not better off, as a result of the tax bill. Democrats said Trump’s assertion is meaningless until he releases his tax returns.
A Senate vote on the bill is expected in coming hours, with Republicans confident of passage. Once approved by both chambers, the bill would go to the White House for the president’s signature.
Some Democrats all but conceded defeat.
“The majority has the votes and there is not much Democrats can do to stop it,” Slaughter said.
Public opinion polls consistently showed more Americans opposing than backing the bill. Several Republican lawmakers have blamed the news media, saying reporters have misrepresented the tax bill and downplayed its potential benefits.