Sunday, December 17, 2017
   
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House Republicans pass $1.4tn tax reform bill

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Trump-on-HillHouse Republicans have passed a controversial overhaul of the US tax code that slashes corporate rates.

 

Thursday's vote came after US President Donald Trump made a rare visit to Congress to rally lawmakers around the tax reform plan.

 

The Senate is working to build support for its own version of the bill, but one Republican has said he is a 'no'.

 

The plan also faces stiff opposition from the Democrats, who say it is a give-away to the wealthiest Americans.

 

The Republicans' attempts to pass the most significant overhaul of the US tax code since 1986 are a critical test for the party and president.

 

President Trump - who has called the bill a "big, beautiful Christmas present" - visited House Republicans on Thursday to give a pep talk before the vote.

 

The bill cleared the House 227-205.

 

What's the next step?

 

Analysts expect Republicans in the Senate to pass the measures without Democratic votes, and later reconcile the two versions.

 

But Republicans are facing some opponents within their own party, which could endanger the legislation's prospects.

 

Without Democratic support, the Senate can afford to lose only two Republican votes.

 

On Wednesday Senator Ron Johnson, from Wisconsin, said he does not support the bill and does not think it does enough to help small businesses.

 

What's in the plan?

 

Broadly speaking, the Republican proposal would slash the corporate rate from 35% to 20% and change how overseas profits and payment from overseas subsidiaries are taxed.

 

It would also eliminate a range of targeted benefits for individuals and families, in favour of boosting the amount people can deduct from their tax bill.

 

Supporters say the bill offers tax relief and will boost economic growth.

 

Republicans estimate that the average American family of four will see their taxes lowered by $1,182 (£895).

 

Critics say the biggest beneficiaries will be large firms and very wealthy families. While many households could see lower taxes at first, over time some of those benefits would expire.

 

Opponents say the new version does not do enough to simplify the tax code for businesses - one of the original goals of the reform - and they say the proposal is fiscally irresponsible.

 

The House plan would cost $1.4tn to 2027, while the Senate version would cost $1.5tn, according to estimates from the Joint Committee on Taxation.



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