House Passes Tax Reform Bill

House Passes Tax Reform Bill

Speaker of the House Paul Ryan has overseen what he aimed for his entire political career: passage of a tax reform bill.

The Senate will vote on it tonight and if it goes through, it will land on President Donald Trump’s desk. If he signs it then the GOP will have its first major agenda victory of 2017 after failed attempts to repeal Obamacare. This bill includes language to repeal the Obamacare individual mandate.

But it looks like the House will have to revote on Wednesday since Democrats said three provisions in the bill violate Senate rules.

The Senate will remove the provisions and vote on the bill, which will send it back to the House.

The final vote was 227 – 203 with 12 Republicans voting no.

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From Politico:

“This is a day I have looked forward to for a very long time,” he said on the House floor. “Today is about how much better things can be: More jobs, fairer taxes, and bigger paychecks. Faster growth and real upward mobility. A strong economy that makes all of us stronger.”

But when Ryan proclaimed “Today, we give the people of this country their money back,” he was heckled from the public gallery.

“You’re lying, you’re lying!” a woman shouted. “Only the rich people are going to get any money!”

That’s the message Democrats have been trying to get across, as they scorn the Republican-only exercise as a giveaway to the wealthy and corporate interests. In the House, Democrat after Democrat stood to denounce the legislation.

Congress’s Joint Committee on Taxation said that those in the middle class “will get $61 billion in tax cuts in 2019.” From The Wall Street Journal:

That amounts to 23% of the tax cuts that go directly to individuals. By 2027, however, these households would get a net tax increase, because tax cuts are set to expire under the proposed law.

The calculations are based on JCT estimates of cuts going to households that earn $20,000 to $100,000 a year in wages, dividends and benefits. Those households account for about half of all U.S. tax filers, with nearly a quarter making more and a quarter making less.

Those who make $500,000 or more, a group that makes up 1% of filers, will also receive a cuts worth $61 billion in the first year. By 2027, that cut could be $12 billion.

WSJ points out that that cut “includes income earned by pass-through businesses such as partnerships and S-corporations that pay taxes on individual returns.”

Businesses have also found some surprises in the bill, especially with the corporate tax rate going down to 21% and the elimination of the corporate alternative minimum tax. From WSJ:

The rate takes effect on Jan. 1, a year sooner than proposed in the Senate bill. That promises firms an extra year of lower tax and avoids a delay that worried many tax experts.

“The level of gaming that would have occurred if you would have had a 35% rate in 2018 and a 21% rate in 2019, it would have been truly amazing,” said Steven Rosenthal, senior fellow at the nonpartisan Tax Policy Center think tank.

At the White House press briefing, Press Secretary Sarah Huckabee Sanders said that Trump is excited to sign the bill:

“This plan fully ​addresses helping the middle class,”​​ Ms. Sanders said, calling the bill the “most significant tax cut” ever.​

Ms. Sanders didn’t commit to any particular plans for the president to sign the bill — including not saying it would definitely take place before the Christmas holiday — and said that officials remained focused on seeing it pass the Senate but that the president was “very excited to sign it.”

She did not engage with a reporter asking whether the president would personally benefit from the bill, contrary to his own assertion that he would not. “This is a tax plan that we hope benefits all Americans, primarily and priority number one, middle-class Americans,” she said.

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