President Trump celebrated the passage of his tax bill at the White House on Wednesday along with Republican congressional leaders.
“It’s the largest tax cut in the history of our country,” Trump said at a White House ceremony.
A vote of 224-201 in the House on Wednesday was the final hurdle before it was sent to Trump to become law. No Democrats voted for it, and they were joined in opposition by 12 Republicans.
It is unclear when Trump will actually sign the legislation.
The Senate passed the massive tax bill early on Wednesday morning, but the House, which had cleared it on Tuesday, had to vote on it again because of revisions made to the legislation.
The vote in the Senate 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.
“In this bill, not only do we have massive tax cuts and tax reform, we have essentially repealed Obamacare, and we will come up with something that is much better,” Trump told reporters on Wednesday. The legislation also repeals the individual mandate that required Americans to purchase health insurance.
“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, and he criticized AT&T for paying a low effective rate for years but not using that tax savings then to boost employment.
Schumer later issued a statement on AT&T’s announcement, saying, “Leaving aside that AT&T has a merger pending before President Trump’s Justice Department, it’s good that they’ve worked with the Communications Workers of America to start making progress on the promised $4,000 raise for workers. However, their announcement today is the exception, not the rule, when it comes to the biggest corporations spending their windfall.” His office provided a list of $83.7 billion in stock buybacks that have been announced by major companies since the Senate first passed the bill earlier this month.
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.