New Tax Bill Key Points

Vice-President Mike Pence declared the narrow 51-49 victory to applause from Republicans in the early hours of Saturday morning. The final draft of the bill went through several changes in order to bring reluctant Republicans on board. Republicans have a 52-48 majority in the Senate.

Two items in the bill are:

Tax Cuts and Jobs Act: The corporate tax rate would be permanently lowered from 35% to 20%, while future foreign profits of US-based firms would be mainly exempt from tax. This is not necessarily bad since the increased fiscal mobility would allow for growth—read: more jobs. But if the locations are foreign-based, not so much for jobs within U.S. borders.

The measures were passed despite the non-partisan Senate Joint Committee on Taxation warning on Thursday that the bill would add significantly to the federal deficit over a decade. The committee's findings contradicted a White House claim that economic growth would compensate for the tax cuts.

Most Americans across all income levels would see modest tax breaks until 2026 and the committee said after that families earning under $75,000 a year would likely face higher taxes.

Some opponents highlighted a measure that would end a requirement introduced under Obamacare for most taxpayers to buy health insurance or face a fine. According to the non-partisan Congressional Budget Office, scrapping the mandate would push up insurance premiums and lead to 13 million people losing coverage by 2027.

On the other hand, not making health insurance a requirement gives Americans back some lost freedom ripped from them by Obama. Whether Americans choose to believe this is a good thing based on what that particular freedom portends is up to them. But many would agree that making a specific behavior mandatory rather than voluntary is a definite step in the wrong governmental direction.

The second item is a $10,000 property tax deduction as requested by Senator Susan Collins, one of the Republicans who had been reluctant to back the bill.

How did other senators react?
After the vote, Senate Democratic leader Chuck Schumer said his opponents would pay the price at the ballot box in mid-term elections next year.

"My Republican friends will ultimately pay consequences for this bill in 2018 and beyond. The Republican party will never again be the party of tax cuts for middle-class people," he warned.

He said the measures would endanger social security and medical provision.

Independent Senator Bernie Sanders was among the most vocal critics, declaring during the debate that the American treasury was "being looted". But Republican Senate majority leader Mitch McConnell, who succeeded in bringing dissenting party members into line, said the legislation would prove to be "just what the country needs to get growing again".

He brushed aside complaints that it was pushed through without proper scrutiny, saying: "Everybody had plenty of opportunity to see the measure. You complain about process when you're losing and that's what you heard on the floor tonight."

Republican Senator Bill Cassidy also praised the bill, saying "working families and middle-income families across the nation will be better off".

Democrats were angry about the last-minute revisions, complaining that they had not been given enough time to digest the nearly 500-page document, with handwritten changes to the legislation.

The only Republican senator who refused to back the legislation was Bob Corker.

"I am not able to cast aside my fiscal concerns and vote for legislation that... could deepen the debt burden on future generations," he said.


 


 




No corresponding comment