U.S. Republican tax plan hits snag in Senate
Democrats say provisions violate rules, which would require House to vote again
WASHINGTON— Democrats say three provisions in the Republican’s $1.5-trillion (U.S.) tax bill violate Senate rules and will probably be removed before that chamber votes on the measure.
The House approved the legislation Tuesday. But this means the House will have to vote again on the legislation once it has been amended and approved by the Senate.
Senate passage was expected Tuesday night or early Wednesday. GOP House Majority Leader Kevin McCarthy’s office says the House would reconsider the bill Wednesday morning and send it to U.S. President Donald Trump for his signature.
Democrats said the Senate parliamentarian had found three items that violated Senate rules.
These included one provision that would let families use tax-advantaged 529 accounts for homeschooling expenses. The problem was revealed by Vermont independent Sen. Bernie Sanders and Oregon Democrat Ron Wyden. The House approved the bill by a mostly party-line vote of 227203.
The Senate result was in doubt in recent weeks. Only on Friday did Republican leaders cement the needed support for the legislation, securing endorsements from wavering GOP senators Marco Rubio of Florida and Bob Corker of Tennessee. More holdout GOP senators — moderate Susan Collins of Maine and Mike Lee of Utah — came into the fold on Monday.
Now the biggest reshaping of the U.S. tax code in three decades is on a clear path to passage and a presidential signing into law.
The complex legislation, hammered out in compromise, blends elements of separate House and Senate bills that were recently passed. It permanently slashes the tax rate for corporations from 35 per cent to 21per cent and reduces levies on the wealthiest Americans, while making more modest tax reductions for most others.
The tax cuts for individuals are temporary, expiring in 2026. It doubles the standard deduction used by about two-thirds of U.S. households, to $24,000 for married couples, also ending in eight years.
The $1,000-per-child tax credit doubles 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 credit, a measure intended to deny the credit to people who are in the U.S. illegally.
Those who itemize lose some deductions. The legislation also repeals an important part of former president Barack Obama’s health-care law — the requirement that all Americans carry health insurance or face a penalty — as the GOP looks to unravel a law it failed to repeal and replace this past summer.
The package represents the first major legislative achievement for the Republicans after nearly a full year in control of Congress and the White House. It is expected to add to the nation’s $20-trillion debt. The tax cuts are projected to add $1.46 trillion over a decade. GOP lawmakers say they’d expect a future Congress to continue the tax cuts so they won’t expire. If achieved, that would drive up deficits even further.
Democrats, who were excluded from the closed-door drafting sessions, have kept up a litany of criticism that the legislation favours big corporations and the wealthy, snubbing the middle class.