“Today is a momentous day for America,” Rep. Mark Meadows, R-N.C., chairman of the House Freedom Caucus, said in a statement. “The forgotten men and women of our country voted to elect President [Donald] Trump and a Republican Congress to fix our broken tax code that taxes Americans too highly, ships their jobs overseas, and directly undermines the fundamental principles that make America great. Passage of this bill is a monumental step toward doing just that.”
However, since three elements in the House bill violate the Senate’s Byrd rule, according to Business Insider, the House will vote again on a slightly revised tax reform bill Wednesday. The Byrd rule applies to legislation passed through reconciliation, which allows bills to pass the Senate with 51 votes.
House Speaker Paul Ryan said the bill was “one of the most important pieces of legislation that Congress has passed in decades to help the American workers and to help grow the American economy.”
“For all those millions [of] men and women in America who are living paycheck to paycheck, who are struggling to get ahead—help is on the way,” Ryan added. “For all those businesses that are tied with one hand behind their back in this global economy, having a hard time competing—help is on the way.”
The American people placed their trust in us to do this work for them. Today, we are making good that promise. pic.twitter.com/npTKhXPAZO
— Paul Ryan (@SpeakerRyan) December 19, 2017
Here's the list of all the Republicans who voted "no" on the House tax bill:
– King (NY)
– Smith (NJ)
— David Martosko (@dmartosko) December 19, 2017
The final tax reform bill maintains the current number of brackets, seven, but lowers the rates to 10, 12, 22, 24, 32, 35, and 37 percent.
It caps the state and local tax deduction, which allows taxpayers who itemize instead of taking the standard deduction to deduct from their federal taxable income any property and income taxes paid to state or local governments, at $10,000.
The legislation reduces the federal corporate tax rate from 35 percent to 21 percent and repeals the corporate alternative minimum tax but leaves in place the individual alternative minimum tax and increases the exemption.
The bill also increases the current $1,000 child tax credit to $2,000 and gives a $500 credit for non-minor child dependents, which was reportedly included to secure the vote of Sen. Marco Rubio, R-Fla.
The bill also repeals Obamacare’s individual mandate.
Following the House’s vote, Trump, who has said he wants to sign a bill by Christmas and made passing tax reform a major goal of his first year in office, congratulated Republican leadership.
Congratulations to Paul Ryan, Kevin McCarthy, Kevin Brady, Steve Scalise, Cathy McMorris Rodgers and all great House Republicans who voted in favor of cutting your taxes!
— Donald J. Trump (@realDonaldTrump) December 19, 2017
According to a Dec. 18 report from the Tax Foundation, the organization estimates that Republicans’ tax plan “would significantly lower marginal tax rates and the cost of capital, which would lead to a 1.7 percent increase in [gross domestic product] over the long term, 1.5 percent higher wages, and an additional 339,000 full-time equivalent jobs.”
The Tax Foundation also estimates that the GOP tax plan would bring $1 trillion in federal revenues from economic growth.
Ahead of the House’s vote Tuesday, Sen. David Perdue, R-Ga., said the Republican tax reform bill will be a boon for middle-class families.
“This is indeed a tax cut for the middle class,” Perdue said in an interview on CNBC’s “Squawk Box.” “A family of four, who make the median income of $73,000, are going to get a 60 percent tax cut. A single mom, with one child, making $41,000 is going to get a 75 percent tax cut.”
House Minority Leader Nancy Pelosi, D-Calif., decried the tax plan, calling it a “scam.”
— Nancy Pelosi (@NancyPelosi) December 19, 2017
Rep. Kevin Brady, R-Texas, chairman of the House Ways and Means Committee and the GOP’S top tax writer, praised the passage of the bill.
— RepKevinBrady (@RepKevinBrady) December 19, 2017
The last time Congress updated the tax code was in 1986, with President Ronald Reagan’s Tax Reform Act.