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Republicans in the House passed the biggest reform of the tax code in more than 30 years on Tuesday afternoon. The bill was approved on a party-line vote, 227-203 with every Democrat and 12 Republicans voting against the legislation. The bill now heads to the Senate, where Majority Leader Mitch McConnell (R-Ky.) plans to hold a vote later on Tuesday.
The bill will add $1.5 trillion to the deficit over the next decade, with most of that money going toward tax cuts for corporations and the richest Americans. The bill reduces the top income tax rate from 39.6 percent to 37 percent and cuts the corporate tax rate from 35 percent to 21 percent. Most Americans will receive some form of tax cut in the early years after the bill becomes law, but the biggest benefits go to wealthier Americans. After 2025, the individual tax cuts will expire, at which point, according to the Tax Policy Center, lower-income families would actually face a tax increase compared to current law. The middle class would largely see no benefit, while the wealthy would still come out ahead.
Republicans are also using their tax bill to erode Obamacare. The bill repeals the health law’s individual mandate, which forces people to pay a penalty if they don’t purchase insurance coverage. While the consequences of that rollback aren’t as far-reaching as the full Obamacare repeal bills that Congress considered over the summer, they will likely lead to premium increases and could cause insurance companies to stop offering Obamacare plans in some parts on the country.
This is a breaking news story and will be updated.
