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Republicans unveil final version of tax bill

Republicans late Friday afternoon unveiled the final text of their bill to rewrite the tax code, which they are racing to send to President TrumpDonald John TrumpTillerson: Russia already looking to interfere in 2018 midterms Dems pick up deep-red legislative seat in Missouri Speier on Trump's desire for military parade: 'We have a Napoleon in the making' MORE’s desk before Christmas.

Like the bills that came before it, the legislation produced by the House-Senate conference committee would result in massive changes to the tax system, cutting rates for many individuals and businesses while placing new limitations on tax breaks. (Read the bill here.)

"I'm very excited about this moment. It's been 31 years in the making and took a lot of hard work by a lot of people to make this day happen. I'm proud of the Tax Cuts and Jobs Act," said Rep. Kevin BradyKevin Patrick BradyOvernight Finance: Senators near two-year budget deal | Trump would 'love to see a shutdown' over immigration | Dow closes nearly 600 points higher after volatile day | Trade deficit at highest level since 2008 | Pawlenty leaving Wall Street group Lawmakers discuss extending expired tax breaks in spending bill Dow falls more than 1,000 in biggest daily point-drop ever MORE (R-Texas), the chairman of the House Ways and Means Committee.

The measure appears on track for passage next week, after getting a jolt of momentum Friday from Sens. Marco RubioMarco Antonio RubioTrump must send Russia powerful message through tougher actions McCain, Coons immigration bill sparks Trump backlash Taking a strong stance to protect election integrity MORE (R-Fla.) and Bob CorkerRobert (Bob) Phillips CorkerPentagon: War in Afghanistan will cost billion in 2018 K.T. McFarland officially withdrawn as nominee for ambassador K.T. McFarland withdraws as nominee for ambassador MORE (R-Tenn.), who both announced their support.

The House will vote on the bill first, on Tuesday, and then the Senate will vote. 

Under the final bill, the top individual rate would be lowered from 39.6 percent to 37 percent, which is lower than the top rate in the original bills passed by the House and Senate. The corporate tax rate would be cut from 35 percent to 21 percent, up from 20 percent in the original bills. 

The measure has seven individual tax brackets, and like both the House and Senate bills, substantially increases the standard deduction.

It also increases the child tax credit from $1,000 to $2,000, as the Senate bill did, and increases the maximum amount that is refundable to $1,400, up from $1,100 in the original Senate measure. The latter change was made to secure Rubio’s vote.

The legislation preserves the deductions for mortgage interest and charitable giving, though it lowers the cap on the mortgage deduction from $1 million to $750,000. 

Seeking to win over House Republicans from high-tax states, the conference committee legislation caps the state and local tax deduction at $10,000, with filers allowed to deduct property taxes and state and local income and sales taxes. 

Several popular tax preferences that were eliminated in the House bill are preserved. They include the deduction for medical expenses, the deduction for student-loan interest, the exclusion for graduate students’ tuition waivers and the ability to issue tax-exempt private-activity bonds.

The bill does not repeal the estate tax or the alternative minimum tax for individuals, both long-time goals for Republicans, but it does increase the exemption amounts. The corporate alternative minimum tax, which was retained in the Senate bill, is eliminated, a change that is certain to please the business community.

The final bill provides tax relief to pass-through businesses — entities such as small businesses whose income is taxed through the individual code — through a 20-percent deduction. 

Sen. Rob PortmanRobert (Rob) Jones PortmanGOP leader: Congress may settle for pared-down immigration deal Senate Republicans call on Trump to preserve NAFTA Key senator floats new compromise for immigration talks MORE (R-Ohio), a member of the conference committee, said the structure of the final bill hews closer to the Senate's version because of the pass-through provisions. The Senate’s policies were “viewed as simpler,” Portman said. 

The measure also moves the U.S. to a territorial tax system that generally does not subject American companies’ foreign earnings to U.S. taxes. Companies’ current offshore earnings would be taxed at rates of 15.5 percent for liquid assets and 8 percent for illiquid assets, which are higher rates than in both the House and Senate bills.

Like the Senate bill, the legislation repeals ObamaCare’s individual insurance mandate starting in 2019 and allows for drilling in a portion of the Arctic National Wildlife Refuge. 

Republicans are advancing the measure through a process called reconciliation that prevents a filibuster from Democrats in the Senate. Under reconciliation, bills can’t add to the deficit after 10 years, so the bill’s tax cuts for individuals expire after eight years. The corporate tax changes and individual mandate repeal are permanent.

The House and the Senate are expected to approve the bill next week and send it to Trump, delivering him his first major legislative victory.

Republicans have long wanted to rewrite the tax code, arguing that doing so would boost economic growth and lead to more job creation. 

The Joint Committee on Taxation estimates the bill will lower federal revenue by $1.456 trillion over 10 years — a key finding, as the bill cannot add more than $1.5 trillion in debt and qualify for special Senate rules.

Most analysts doubt that the economic growth from the bill will offset the revenue losses, but GOP lawmakers and the White House disagree. They say the changes to the tax code will unleash business investment.

Corker, who voted against the original Senate bill because of deficit concerns, said in a statement Friday that he will vote for the final package because he thinks the bill accompanied with other policies “could have significant positive impact on the well-being of Americans and help drive additional foreign direct investment in Tennessee.”

While Rubio's and Corker’s support boosts the odds for passage, several GOP senators have not yet announced how they will vote, including Sens. Susan CollinsSusan Margaret CollinsMcConnell: 'Whoever gets to 60 wins' on immigration GOP senators turning Trump immigration framework into legislation Longtime Clinton confidant blames Comey for 2016 loss MORE (Maine) and Jeff FlakeJeffrey (Jeff) Lane FlakeMcConnell: 'Whoever gets to 60 wins' on immigration Huckabee Sanders: Dems need to decide if they 'hate' Trump 'more than they love this country' Trump spokeswoman fires back at Flake: 'His numbers are in the tank' MORE (Ariz.).

Republicans expect Sens. John McCainJohn Sidney McCainMcConnell: 'Whoever gets to 60 wins' on immigration Meghan McCain: Melania is 'my favorite Trump, by far' Kelly says Trump not likely to extend DACA deadline MORE (R-Ariz.) and Thad CochranWilliam (Thad) Thad CochranMcConnell urging Mississippi gov to appoint himself if Cochran resigns: report A pro-science approach to Yucca Mountain appropriations Senate Republicans call on Trump to preserve NAFTA MORE (R-Miss.) to return to the Senate to vote for the tax bill. Both missed votes this week because of health issues.

Democrats are expected to remain united in opposition against the bill. They say the measure provides most of its benefits to wealthy individuals and corporations and would end up raising taxes on some middle-class families.

- Scott Wong contributed. This story was updated at 6:32 p.m.