The GOP led House of Representatives passed Tax Reform today bringing the historic Tax Cut package one step closer to the President’s desk. The vote was virtually along party lines with 227 Republicans voting for the bill, 12 voting against. two Democrats did not vote. All remaining Democrats voted against the measure.
Passage in the House paves the way for the Senate to take the bill up later today or tomorrow as is scheduled. The bill is expected to pass in the Senate barring any last-minute defections. The President has promised to sign the bill as soon as it reaches his desk.
Promise kept
Republicans are billing passage of the package as a promise kept to the American people. Capitol Hill Republicans, along with the President, pledged to deliver tax cuts to the American people by Christmas. Tax reform would be the first and only major piece of legislation signed by President Trump during his first year in office, traditionally the most productive time, legislatively, for a new administration.
The White House has struggled to get major planks of its agenda signed into law, despite all three legislative bodies in Washington being controlled by Republicans. Frequent attempts to repeal and replace Obamacare have failed to get through Congress and the administration hasn’t presented its national infrastructure plan which the President also pledged to enact during his first year.
Republicans are hoping that tax reform passage will help build momentum for the Party as they head into 2018, a midterm election year.
Controversy
Critics have been vocal about the tax cut package, however, believing the package amounts to a gift to the wealthiest Americans.
The top line tax rate would drop from 39.6% to 37% under the new plan and would go into effect on income above $600,000 for a married couple filing jointly.
Under the old code, income above the $470,700 was taxed at the top line rate. The estate tax is also doubled, allowing the wealthy to pass on estates worth up to $11.2 million without having to pay taxes on them. The old exemption mark was $5.6 million.
But perhaps the biggest winners under the new tax code are corporations.
The corporate tax rate would be cut from 35 to 21 percent. The US corporate tax code will also become territorial, meaning that corporations would pay no income tax on sales made overseas.
Republicans believe cutting corporate income taxes will lead to greater investment by corporations in areas like research and development, which in turn, will lead to more hiring and increased wages in the labor force.
