House Republicans pass major tax reform Bill

Vote on overhauling tax system a victory for Paul Ryan but proposal faces Senate hurdles

Speaker of the House of Representatives Paul Ryan and US president Donald Trump  at the US Capitol in Washington DC  on Thursday. Photograph: Saul Loeb/AFP/Getty Images

Speaker of the House of Representatives Paul Ryan and US president Donald Trump at the US Capitol in Washington DC on Thursday. Photograph: Saul Loeb/AFP/Getty Images

 

The US House of Representatives passed a far-reaching tax reform package on Thursday in a big win for Republicans, though doubts remained over the future of the Senate’s proposal.

In a highly-anticipated vote, members of Congress backed by 227 to 205 the Tax Cuts and Jobs Act, which promises one of the biggest changes to the US tax system in decades. 

Among the main changes included in the House proposal is a reduction in the current system of six tax brackets to four, a cut in the corporate tax rate to 20 per cent, and a one-off tax to encourage companies to repatriate their offshore profits.

But the vote, though significant, is just the first step in the legislative process. As House speaker Paul Ryan hailed the vote in the House, on the other side of Capitol Hill the Senate’s plan appeared to be running into difficulty.

Several Republican senators expressed concerns about the Bill, particularly last-minute changes that were introduced by the Senate late on Tuesday including a provision on healthcare which would remove the obligation on Americans to purchase health insurance.

Susan Collins, a moderate Republican from Maine who voted against the healthcare plan in July, was among those opposing the Senate Bill, along with Ron Johnson, a conservative, who said he could not support it in its current form because it unfairly benefits large corporates over regular businesses.

McCain wavering

Other wavering senators include John McCain, who famously scuppered the Republican healthcare plan in July when he withdrew his support at the last minute during a late-night vote in July.

With Republicans holding 52 seats in the 100-member Senate, the party can only lose the support of two senators, with vice-president Mike Pence holding a casting vote.

A compromise between the House and Senate version needs to be reached before the Bill can be enacted.

President Donald Trump made a rare trip to Congress on Thursday to help rally support for the plan, which has been championed by Mr Ryan and House majority leader Kevin McCarthy. The president addressed a closed door meeting of House Republicans about an hour before the vote on Capitol Hill.

The passage of the Bill before the Thanksgiving break represents a significant victory for Mr Ryan, and one of the few legislative wins by Republicans since last year’s election.

Speaking on the floor of the House, Mr Ryan described the tax reform legislation as a “generational defining moment for our country”.

“What we’re doing here is not just determining the kind of tax code we’re going to have, what we’re doing is determining the kind of country we are going to have.”

He said that passing the Bill was the “single biggest thing we can do to grow the economy, restore opportunity and help those middle income families who are struggling”.

Corruption trial

Meanwhile, in a dramatic end to the nine-week trial of New Jersey senator Bob Menendez on corruption charges, the judge in the case declared a mistrial after the jury could not reach a verdict. Speaking outside the court, an emotional Mr Menendez described the trial as “an unjust prosecution”.

The development avoids a potential succession battle over the New Jersey Democrat’s seat in the Senate, though the justice department, led by attorney general Jeff Sessions, can decide on whether to hold a retrial.

A former chairman of the Senate foreign relations committee, Mr Menendez was first investigated about gifts he received from Salomon E Melgen, a prominent opthalmologist, five years ago.