The massive $1.5 trillion tax overhaul lauded by President Donald Trump and fellow congressional Republicans as the biggest tax-cut in history passed on Wednesday, bringing significant tax cuts for corporations and the wealthiest Americans.
The first major overhaul of the nation’s tax laws since 1986, Democrats call the legislation a boon to the rich that leaves middle-class and working Americans behind.
Passing 224-201, only 12 Republican senators broke with the party and voted against the tax reform bill. Senators from Idaho, Mike Crapo and Jim Risch were not among the dissenters.
“The tax reform legislation passed by Congress will produce growth not seen in generations, giving Americans access to higher wages, greater job opportunities and a more vibrant economy,” Crapo said in a statement released Wednesday. “Idahoans in every income group will see a reduction in their tax burdens, with the largest percentage reductions benefiting those in lower and middle-income tax categories.”
On Tuesday, the House approved the tax overhaul on a 227-203 vote, though lawmakers had to vote again Wednesday because of provisions in the House bill that did not align with the Senate’s special budgetary rules.
All House Democrats voted in opposition to the bill.
Congressional Republicans have cast the bill as a blessing for the middle class, an argument they will stress in their drive to hold onto their congressional majorities in next year’s midterm elections. But one comment by Trump could complicate their messaging.
In praising the bill, Trump cited the deep cut in the corporate tax rate, from 35 percent to 21 percent.
“That’s probably the biggest factor in our plan,” the president said at the White House.
Starting next year, families making between $50,000 and $75,000 will get average tax cuts of $890, according to an analysis by the nonpartisan Tax Policy Center. Families making between $100,000 and $200,000 would get average tax cuts of $2,260, while families making more than $1 million would get average tax cuts of nearly $70,000, according to the analysis.
But if the cuts for individuals are allowed to expire, most Americans — those making less than $75,000 — would see tax increases in 2027, according to congressional estimates.
“A typical family of four is projected to receive a $2,059 tax cut, and, as a result of increasing the standard deduction and simplifying other portions of the code, many lower and middle-income families will no longer have to save their receipts and spend many hours and hundreds of dollars every year to pay their taxes,” Crapo said. “This proposal will strengthen our economic competitiveness by creating a more competitive tax code that enables capital formation resulting in new companies being formed, staying here and expanding job opportunities.”
The GOP has repeatedly argued the bill will spur economic growth as corporations, flush with cash, increase wages and hire more workers. But many voters in surveys see the legislation as a boost to the wealthy, such as Trump and his family, and a minor gain at best for the middle class.
Tax cuts for corporations would be permanent while the cuts for individuals would expire in 2026 to comply with Senate budget rules. The tax cuts would take effect in January, and workers would start to see changes in the amount of taxes withheld from their paychecks in February.
The top tax rate for well-off individuals would be lowered from 39.6 percent to 37 percent.
The legislation repeals an important part of the 2010 health care law — the requirement that all Americans carry health insurance or face a penalty — as the GOP looks to unravel the law it failed to repeal and replace this past summer. It also allows oil drilling in the Arctic National Wildlife Refuge.
The $1,000-per-child tax credit doubles to $2,000, with up to $1,400 available in IRS refunds for families that owe little or no taxes.
The bill is projected to add $1.46 trillion to the nation’s debt over a decade. GOP lawmakers say they expect a future Congress to continue the tax cuts so they won’t expire. That would drive up deficits even further.
Only about 1 in 3 voters have supported the legislation in recent days, according to several polls. About half of Americans believe the plan will hurt their personal finances. And 2 in 3 voters say the wealthy will get the most benefits, according to a USA Today/Suffolk University poll released last week.
The bill now heads to president’s desk for signing.
“Once the President signs our tax reform legislation into law, taxes will be reduced for all Americans in every income bracket, except for the lower-income earners who will continue to pay zero percent” Risch said. “This historic reform will stimulate business activity for large and small enterprises, which will reduce the deficit and debt long-term. I was proud to support this once-in-a-generation reform that will benefit all Idahoans.”
