US Republicans from both houses of Congress released their tax bill today, moving one step closer to delivering the most significant changes to America’s tax system in more than three decades. The tax bill promises massive tax cuts for the middle class and businesses. The Tax Cuts and Jobs Act lowers the corporate tax rate to 21 per cent (beginning January 1, 2018) down from 35 per cent, the largest reduction in the history of the US. The voting on the $1.5 trillion tax cut bill will be held next week and if passed will be the most sweeping tax overhaul in decades. President Donald Trump, who had promised tax-cut during his election campaign, now wants the bill signed into law by the end of the year. “By lowering tax rates, simplifying the rigged and burdensome tax code, and repealing the failed tax on lower- and middle-income households known as the Obamacare individual mandate, this legislation will grow our economy, raise wages, and promote economic competitiveness,” White House Press Secretary Sarah Sanders said.
According to the Congressional Budget Office and the staff of the Joint Committee on Taxation’s estimates, the plan would add $1.455 trillion to the deficit over next 10 years. “President Donald Trump applauds the House and Senate conferees on coming to an agreement on the Tax Cuts and Jobs Act, and looks forward to fulfilling the promise he made to the American people to give them a tax cut by the end of the year,” Sanders said. The White House statement came after the House and the Senate agreed on the unified tax bill. Senators Marco Rubio and Bob Corker also voiced their support for the bill.
House Majority Leader Kevin McCarthy hoped to deliver the bill to the President’s desk just in time for Christmas. “We have been working toward this for years, and now the American people are closer to a plan that will deliver higher wages, lower taxes, a simpler system, and a stronger American economy,” he said. House Speaker Paul Ryan said the bill overhauls America’s tax code to deliver tax relief for workers, families and job creators, and revitalise the nation’s economy. The act will lower taxes across the board, eliminate costly special-interest tax breaks, and modernise international tax system. “The Tax Cuts and Jobs Act will help create more jobs, increase paychecks, and make the tax code simpler and fairer for Americans of all walks of life,” said Ryan.
With this bill, the typical family of four earning the median family income of $73,000 will receive a tax cut of $2,059. The Bill also expands the Child Tax Credit from $1,000 to $2,000 for single filers and married couples to help parents with the cost of raising children. The tax credit is fully refundable up to $1,400 and begins to phase-out for families making over $400,000.
Ryan said the reduction in the corporate tax rate will help American businesses bring home foreign earnings to invest in growing jobs and paychecks in local communities. “This is the first major tax reform in a generation. It means relief for hardworking families and a jumpstart for our economy,” Ryan said.
The opposition Democrats, however, slammed the Bill alleging that it benefited only the rich. “Slashing the top tax rate for the wealthiest Americans even deeper is Republicans’ final insult to hard-working Americans in this deficit-exploding scam of a bill,” said Democrat leader Nancy Pelosi.
“Republicans went into conference with two bills that raise taxes on tens of millions of middle class families. But instead of actually helping middle class Americans, the GOP throws them a few meagre crumbs while slashing taxes for millionaires even deeper,” she said.
Passage of the biggest US tax rewrite since 1986 would provide Republican lawmakers and President Trump their first major legislative victory since he took office in January.