House Republicans pass tax reform bill and cross fingers the Senate acts
House Republicans passed their long-promised tax reform plan on Thursday, a sweeping bill that slashes corporate taxes, but has murkier effects for personal tax filers.
The bill passed 227 to 205, with 13 Republicans voting against the legislation. The Republicans who voted no on the plan come from Democratic-leaning states, where the middle-class could see their taxes go up thanks to the plan.
The tax plan House Republicans passed immediately cuts the corporate tax rate from 35% to 20%, and caps some popular deductions for individual filers that help middle-class families — including the state and local tax deduction and the mortgage interest deduction.
Many suburban residents in traditionally Democratic states — which have high property values and state and local taxes — would get hit by the changes to the SALT and mortgage interest deduction.
The House tax reform bill also changes the estate tax — which hits the inheritance of the wealthiest Americans. The House doubles the amount of tax exempt inheritance, from $5.5 million to $11 million.
Tax reform’s fate now lies in the hands of the Republican-controlled Senate, which has its own version of tax reform.
The Senate could vote on their version of the plan when the chamber returns to Washington after the Thanksgiving recess.
The plan faces obstacles in the Senate.
An analysis by the non-partisan Joint Committee on Taxation released on Thursday found that the plan Senate Republicans drafted would raise taxes on families earning between $10,000 and $30,000 beginning in 2021, while millionaires would get tax cuts.
Senate Republicans can only afford to lose two of their members, or else the plan would fail.
Already one Republican — Sen. Ron Johnson of Wisconsin — said he intends to vote against the plan.
A handful of others, including GOP Sens. Susan Collins, Bob Corker and Jeff Flake, say they have concerns.