WASHINGTON (AP) – Republicans working to execute their first major legislative achievement of Donald Trump’s presidency appear to have secured the votes to pass a massive tax overhaul that Trump hoped to present to the American people for Christmas.
“This is happening. Tax reform under Republican control of Washington is happening,” House Speaker Paul Ryan of Wisconsin told rank-and-file members in a conference call Friday. “Most critics out there didn’t think it could happen. … And now we’re on the doorstep of something truly historic.”
It’s the widest-ranging reshaping of the tax code in three decades and is expected to add to the nation’s $20 trillion debt. The tax cuts are projected to add $1.46 trillion over a decade. The GOP plans to muscle it through Congress next week before its year-end break.
Under the bill, today’s 35 percent rate on corporations would fall to 21 percent, the crown jewel of the measure for many Republicans. Trump and GOP leaders had set 20 percent as their goal but added a point to free money for other tax cuts that won over wavering lawmakers in final talks.
The legislation would lower taxes on the richest Americans. Benefits for most other taxpayers would be smaller.
The bill would repeal an important part of President Barack Obama’s Affordable Care Act – the requirement that all Americans have health insurance or face a penalty – as the GOP looks to unravel a law it failed to repeal and replace this past summer.
Only on Friday did Republicans cement the needed support for the overhaul, securing endorsements from wavering senators.
Marco Rubio of Florida relented in his high-profile opposition after negotiators expanded the tax credit that parents can claim for their children. He said he would vote for the measure next week.
Rubio had been holding out for a bigger child credit for low-income families. After he got it, he tweeted that the change was “a solid step toward broader reforms which are both Pro-Growth and Pro-Worker.”
Sen. Bob Corker of Tennessee, the only Republican to vote against the Senate version earlier this month, made the surprise announcement that he would back the legislation. Corker, the chairman of the Senate Foreign Relations Committee, has repeatedly warned that the nation’s growing debt is the most serious threat to national security.
“I realize this is a bet on our country’s enterprising spirit, and that is a bet I am willing to make,” Corker said.
The White House said Trump “looks forward to fulfilling the promise he made to the American people to give them a tax cut by the end of the year.”
The bill embodies a long-standing Republican philosophy that a substantial tax break for businesses will trigger economic growth and job creation for Americans in a trickle-down economy.
Skeptical Democrats are likely to oppose the legislation unanimously.
“Under this bill, the working class, middle class and upper middle class get skewered while the rich and wealthy corporations make out like bandits,” said Senate Minority Leader Chuck Schumer of New York. “It is just the opposite of what America needs, and Republicans will rue the day they pass this.”
The bill would drop today’s 39.6 percent top rate on individuals to 37 percent. The standard deduction – used by around two-thirds of households – would be nearly doubled, to $24,000 for married couples.
The $1,000-per-child tax deduction would grow to $2,000, with up to $1,400 available in IRS refunds for families who owe little or no taxes. Parents would have to provide children’s Social Security numbers to receive the child tax credit, a measure intended to deny the credit to people who are in the U.S. illegally.
Those who itemize would lose some deductions. The deduction that millions use in connection with state and local income, property and sales taxes would be capped at $10,000. That’s especially important to residents of high-tax states such as New York, New Jersey and California. Deductions for medical expenses that lawmakers once considered eliminating would be retained.
The bill would allow homeowners to deduct interest only on the first $750,000 of a new mortgage, down from the current limit of $1 million.
People who inherit fortunes would get a big break. The bill would double the exemption, meaning the estate tax would apply only to the portion of an estate over $22 million for married couples.
Members of a House-Senate conference committee signed the final version of the legislation Friday, sending it to the two chambers for final passage next week. They have been working to blend the different versions passed by the two houses.
Republicans hold a slim 52-48 majority in the Senate, and two ailing GOP senators missed votes this past week.
John McCain of Arizona, who is 81, is at a Washington-area military hospital being treated for the side effects of brain cancer treatment, and 80-year-old Thad Cochran of Mississippi had a non-melanoma lesion removed from his nose earlier this week. GOP leaders are hopeful they will be available next week.