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House passes final tax bill, edging GOP closer to win

Greg Nash

The House on Tuesday approved the final version of the GOP’s bill to overhaul the U.S. tax code, bringing Republicans closer to getting their first big legislative win with full control of government.

The tax measure easily passed by a vote of 227-203. Just 12 Republicans joined with all Democrats in opposing the bill.

The Senate is expected to pass the bill later on Tuesday, sending it to President Trump’s desk and allowing the GOP to achieve its goal of rewriting the tax code in Trump’s first year in office.

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Multiple protesters interrupted House floor debate on the tax bill Tuesday, including people who shouted “kill the bill, don’t kill us!” as well as a woman in a wheelchair who said she relies on Medicaid and warned that the bill would “starve” the public.

One protester even interrupted Speaker Paul Ryan (R-Wis.) as he delivered a floor speech that he’s wanted to give for decades in support of the tax overhaul.

“Today, we are giving the people of this country their money back. This is their money, after all,” Ryan said.

A woman in the public visitors gallery then shouted, “You’re lying!”

Tax reform has long been a top priority for Ryan and other congressional Republicans, who view it as necessary to improve business competitiveness and boost economic growth. Trump also promised large tax cuts on the campaign trail and in his first months in office.

Republicans view the tax overhaul as critical to maintaining their congressional majorities in 2018, after they failed this year to fulfill their seven-year pledge to repeal ObamaCare.

The first overhaul of the tax code since 1986 sped through Congress at a rapid pace, from House Republicans first unveiling a bill in early November to passing a final bicameral compromise a month later.

By contrast, the 1986 tax-reform effort had bipartisan support and didn’t reach then-President Reagan’s desk until nearly a year after it was first introduced in the House.

Public polling on the GOP’s tax overhaul indicates support hovering at less than 30 percent, which is even lower than the favorability toward ObamaCare when Democrats passed it in 2010. Republicans have battled the perception their plan primarily benefits corporations and the wealthy, even though many middle-class taxpayers will get at least a modest tax cut.

But GOP lawmakers insist people will come to appreciate the changes made by the tax overhaul over time.

“When they get another $100 to $150 a month, by February when the new brackets come out, they’re going to say, ‘Honey! [Senate Minority Leader Charles] Schumer [D-N.Y.] was lying to me! [House Minority Leader Nancy] Pelosi [D-Calif.] was lying! [Rep.] Louise Slaughter [D-N.Y.] was lying! I got more money!’ ” said Rep. Chris Collins (R-N.Y.).

The final tax bill involved lawmakers making some concessions from their original wish lists, but achieves the goals of cutting taxes across the board and making the U.S. corporate tax system more in line with the systems in other countries.

The bill lowers the top individual rate from 39.6 percent to 37 percent, slashes the corporate tax rate from 35 percent to 21 percent and creates a 20-percent deduction for income of pass-through businesses that pay taxes through the individual code.

It increases the exemption amounts for the individual alternative minimum tax and estate tax, and it moves the U.S. to a territorial tax system that generally exempts U.S. companies’ foreign earnings from U.S. taxes.

Additionally, the bill effectively repeals ObamaCare’s individual mandate that requires people to buy health insurance or face a tax penalty, and it allows for drilling in the Arctic National Wildlife Refuge — two top priorities for many Republicans.

In order to comply with budget rules that allow the Senate to pass the bill with a simple-majority vote, most of the tax cuts for individuals expire after eight years while the corporate tax cuts are permanent.

The Joint Committee on Taxation estimated that income groups across the board would on average get a tax cut in 2019. But in 2027, after the individual cuts are set to expire, income groups under $75,000 would on average see their taxes go up. Republicans say they expect the temporary tax cuts will be extended.

The committee also estimated the bill would add $1.46 trillion to the debt over 10 years.

The House Republicans who voted against the bill were mostly lawmakers from New York, New Jersey and California who were troubled by the bill’s $10,000 cap on the state and local tax deduction.

Rep. Rodney Frelinghuysen (R-N.J.), the chairman of the Appropriations Committee who also voted against the House version of the bill, said he opposed the final measure because of its cap on the state and local tax deduction.

“I had hoped to be able to vote for a pro-growth tax bill. However, H.R. 1 forces New Jersey residents to pay for tax cuts for residents in other states. I voted ‘No’!” he said in a statement.

Rep. Pete King (R-N.Y.), whose Long Island-area district would be negatively impacted by the reduced state and local tax deduction, said he’s gotten negative feedback from his constituents.

“Nothing good. Especially from the Republicans. People who voted for Trump are very disappointed,” King said.

One California Republican who voted against the original House version, Rep. Tom McClintock, received a standing ovation during a GOP conference meeting Monday evening upon announcing he would vote for the final version. All of the other 12 Republicans who opposed the original House version did so again on the final measure.

Only one Republican who does not represent a high-tax state cited the bill’s impact on the deficit as a reason for voting “no”: Rep. Walter Jones (R-N.C.). 

“I’m all for tax reform, but it must grow the economy, not the debt,” Jones said in a statement.

Updated: 2:52 p.m.

Tags Chris Collins Donald Trump GOP tax reform Louise Slaughter Paul Ryan Pete King Rodney Frelinghuysen Tax Cuts and Jobs Act Tom McClintock Walter Jones

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