The Senate passed a massive tax bill early on Wednesday morning, likely giving President Donald Trump a major legislative achievement that gives steep cuts to corporations and varied and uncertain relief for individuals.
The vote was 51-48, with all Republicans voting yes and all Democrats and independents voting no. Sen. John McCain (R-Arizona), undergoing cancer treatment, was not present.
The legislation has significant implications for Hollywood, including a massive tax cut for media companies. But there is a lot of anxiety among a number of individuals in the industry, who worry about the loss of key deductions.
House Minority Leader Chuck Schumer spoke out against the legislation before the vote, but was irritated as some Republican colleagues talked during his speech.
“We believe you’re messing up America. You could pay attention for a couple of minutes,” he said.
He cast doubt on the notion that a lower corporate tax cut will lead to more jobs, pointing to companies like AT&T that have paid a low effective rate yet have not added to their employment rolls.
“A year from now Republicans will be running away from this bill in shame for voting for this bill,” he added.
Protesters shouted “Kill the bill, don’t kill us,” from the gallery during the vote before Vice President Mike Pence, presiding over the Senate, asked for order to have them removed.
Tuesday afternoon in the House, the vote on the tax bill was 227 for and 203 against. No Democrats voted in favor of the legislation, and 12 Republicans, primarily from New York and California, voted against.
Republicans broke out in cheers as the vote total was read, and many Democrats stood with their arms folded.
But the House ran into problems about an hour later, when it was announced that they would have to vote again on Wednesday. That is because the Senate had to remove provisions that violate procedural rules, requiring that the House vote on revised legislation before it goes to Trump.
House Speaker Paul Ryan called the bill a “generational defining moment for our whole nation,” insisting that the legislation would benefit workers, put more money in middle class families’ pocketbooks, and return jobs to the United States.
As the vote passed 218, giving the GOP a majority, Ryan gave Rep. Steve Scalise (R-La.) a high five and then gave a hug to Rep. Kevin Brady (R-Texas).
Protesters in the gallery interrupted speakers on the floor at several points. As Ryan gave a floor speech and said, “Today, we are giving people their money back,” a woman shouted, “You’re lying. You’re lying.” Guards removed her. Some House Republicans shouted back at them.
House Minority Leader Nancy Pelosi predicted that the GOP would pay for their votes in future elections.
“This monster will come back to haunt them,” she said in a floor speech in the hour before the vote.
Pelosi and other Democrats hammered Republicans on the legislation as a giveaway to major corporations and the wealthy at the expense of the poor. In her blistering speech, she even quoted from opposition to the bill coming from the U.S. Conference of Catholic Bishops.
Ryan was in the chamber as she spoke, chatting with a colleague.
Several analyses, including from official congressional scorekeepers, have put the cost of the legislation over its 10-year lifespan at $1 trillion to $1.4 trillion. But proponents of the bill, including Treasury Secretary Steven Mnuchin, have insisted that the economic growth from the tax cuts will produce enough new government revenue that they pay for themselves.
Actors Equity has warned that the legislation could mean higher taxes, as it eliminates key deductions for employees to take unreimbursed work expenses. SAG-AFTRA also has expressed concerns over the impact of the bill on its members.
But House Majority Leader Kevin McCarthy told Variety after the vote that “they also will get the lower rate reduction, a more competitive corporate rate, a lot of them are pass throughs so they get a lower rate there. A lot of them are small businesses so they are going to have the lowest rate they have had in 40 years. So look at the entirety of the bill and I think they will be happy.”
Actors Equity responded to McCarthy’s comment on Twitter. “Yes, we do deal in fiction, but any actor who suggested this would be laughed off the stage.”
The legislation will, among other things:
Drop the corporate tax rate. The rate will be set at 21%, a sharp drop from the previous 35%. Republicans say this will be a much more competitive rate that will encourage companies to stay in the United States. Studios, media companies, and broadcasters have long sought the lower rate.
Territorial tax system. Multinational corporations would be taxed only on income made within a country’s borders.
100% expensing. Movie, TV, and theatrical stage producers will be allowed to expense 100% of the cost of their project at the time of release or debut. The provision runs through the end of 2022, after which it falls on a sliding scale.
Set new brackets. There will still be seven brackets, but they will be set at 10%, 12%, 22%, 24%, 32%, 35%, and 37%. A rundown of the rates is here.
Double the standard deduction. It will go from $6,350 to $12,000 for individuals, and from $12,700 to $24,000 for married couples. But the personal exemption — $4,050 for individuals, spouses, and dependents — will be eliminated. It’s expected that many people will no longer itemize, as it also eliminates unreimbursed business expenses for employees.
State and local tax deduction capped. As a way to raise revenue, individuals will be limited in deductions for state and local taxes to $10,000.
Larger child tax credit. It will be doubled to $2,000. with children under 17 eligible.
Eliminates Affordable Healthcare Act mandate. Americans will no longer be required to buy health insurance, which was a key part of Obamacare in ensuring that a healthy population was part of insurance risk pools.
Estate tax exemption lifted. The amount of income that will not be taxes from estates that pass to another family member will increase, from $5.6 million to $11.2 million per individual. Earlier versions of the legislation eliminated the estate tax altogether.