House passes its tax plan as Senate version comes under new attack



U.S. President Donald J. Trump arrives on Capitol Hill in Washington, D.C., on Thursday, Nov. 16, 2017 to speak to the House Republican Conference. (Chris Kleponis/CNP/Zuma Press/TNS)

House Republicans approved their sweeping tax-cut package Thursday, setting up a showdown with the Senate, where Republicans are struggling to take a different approach.

Shortly before the House vote, President Donald Trump arrived on Capitol Hill to bolster Republicans determined to push the tax package through Congress — and accomplish a top GOP priority — despite criticism the benefits would flow mostly to corporations and the wealthy, rather than middle-class Americans.

“I love you. Go vote!” Trump told House Republicans, according to those who attended the private meeting.


Democrats were unified against the plan, and the only GOP defections in the House came mostly from lawmakers in the Northeast and California, who were concerned about the plan’s limits on deductions for state and local income taxes important to their districts.

The vote was 227-205, with 13 Republicans opposed.

“Passing this bill is the single biggest thing we can do to grow the economy, restore opportunity and help these middle-income families that are struggling,” said House Speaker Paul D. Ryan, R-Wis.

Approval sets Republicans in the House and Senate on a collision course, despite having the majority in both chambers, as they rush to finish the package by Christmas. The Senate plan has key differences and is facing greater hurdles for passage.

A report Thursday by the nonpartisan Joint Committee on Taxation said low-income earners, those making less than $30,000 a year, would pay more in taxes starting in 2021 under a revised Senate Republican bill.

By 2023, people with incomes between $30,000 and $40,000 also would see tax increases.

All other income categories — including those earning more than $1 million a year — would see tax decreases through 2025, according to the report.


By 2027, all income categories would face tax increases because the Senate Republican bill calls for tax cuts and other changes to the individual code to expire at the end of 2025.

Sen. Ron Wyden, D-Oregon, called the report “jaw-dropping news.”

But Senate Finance Committee Chairman Orrin Hatch, R-Utah, noted that the projections for low-income people are based on a provision of the Senate bill that does away with the Obamacare mandate that all Americans have health insurance. If low-income earners opt to drop their health care coverage as a result, they would also no longer receive the Affordable Care Act’s federal tax credits that subsidize their premiums. Without those credits, their taxes would effectively go up.

But Hatch said it was unfair to call that a tax increase. “Anyone who says we’re hiking taxes on low-income families is misstating the facts,” he said.

The findings threw the bill’s prospects in the Senate further in flux, adding to concerns already voiced by some Republican senators.

Both bills use a similar framework, centered on corporate tax cut, from 35 percent to 20 percent, that will be permanent. But the proposed individual tax brackets are starkly different in the two plans, and cuts will expire in eight years under the Senate’s bill.

The plans further diverge over how to pay for the package within rules that allow for no more than $1.5 trillion of additional deficit spending.

The Senate plan fully repeals a popular write-off — state and local tax deductions — bringing in more than $1 trillion over the decade. The House bill kept property tax deductions, capped at $10,000, to win over New York and New Jersey Republicans.

Democrats lambasted the package as essentially gutting essential tax breaks to give corporations and the wealthy tax cuts.

The House bill ends student loan interest deductions and medical expense deductions, and caps the mortgage interest deduction to loans of $500,000, repealing the write-off for second homes.

House Minority Leader Nancy Pelosi drew on the teachings of historic and religious figures to warn Republicans off legislation that she said benefits the wealthy and “preys on the middle class.”

“It pillages and loots the middle class. It is a shameful piece of legislation,” Pelosi, D-California, said ahead of the vote. “This is a defining moment.”

In a last-ditch gamble to secure support, Senate Republicans attached the partial Obamacare repeal, eliminating the tax imposed by the Affordable Care Act’s mandate that all Americans have insurance.

That change, which would go into effect in 2019, is expected to leave 13 million more Americans uninsured and drive up premium costs by 10 percent. But it brings in $318 billion over the decade by cutting federal health care subsidies to middle- and low-income Americans who chose not to buy insurance.

“Is this a country that kicks people off of their health coverage to cut taxes for the top 1 percent?” asked Sen. Dianne Feinstein, D-California.


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