Demonstrators create a "die in" in front of the New York Stock Exchange to protest the GOP's tax plan on Tuesday. (Susan Watts/New York Daily News/TNS)

Demonstrators create a "die in" in front of the New York Stock Exchange to protest the GOP's tax plan on Tuesday. (Susan Watts/New York Daily News/TNS)

Senate passes GOP tax bill; House to re-vote

WASHINGTON — The Senate passed the sweeping GOP tax plan 51-49 late Tuesday, sending the bill back to the House for a second vote. The passage will President Donald Trump his most significant legislative victory of the year — one that has come at a steep political cost.

The bill ran into a last-minute problem in the Senate involving two small provisions that were ruled to violate the chamber’s procedures. That ruling will require an unusual additional vote in the House, which congressional leaders said they would hold this morning, before the bill can be sent to Trump for his signature.

Polling shows the $1.5 trillion package remains broadly unpopular, contributing to a political environment in which even surveys by Republican groups show the party in serious danger of losing control of Congress in next year’s midterm elections.

The highly partisan nature of congressional support for the bill has been one of the reasons for its unpopularity with the public at large.

Concern over the state and local tax deduction led two California Republicans to join nine Republicans from New York and New Jersey, which are similarly affected, in voting against the bill in the 227-203 roll call. No Democrats voted for it.

Republican leaders insist the measure, which is centered on a huge cut in corporate taxes, will spur economic growth and become more popular once it takes effect.

“When you have a sling-fest, a mud-fest on TV,” House Speaker Paul Ryan told reporters Tuesday, “that’s what going to happen. But when we get this done, and people see the withholding improvement, when they see the jobs occurring, when they see bigger paychecks … that’s what going to produce the results.”

Rep. Nancy Pelosi on Tuesday called the tax bill an “all-out looting of America.”

“This is the worst bill to ever come to the floor of the House,” Pelosi said. “The American people see this tax scam for exactly what it is.”

Before the vote, protesters in the House galleries shouted “kill the bill!” and interrupted speeches by Ryan and other lawmakers.

Polls suggest Americans reject the tax plan by a wide margin, roughly 2 to 1, according to a new Monmouth University poll. CNN said Tuesday that its latest poll showed that nearly 1 in 4 Americans expect their families will be worse off.

Outside analysts have warned that benefits of the tax overhaul will largely flow to corporations and the wealthy, with lower- and middle-income households seeing only modest improvements.

Moreover, the cut in corporate tax rates will be permanent while the breaks for individuals and families are scheduled to expire in 2025.

Taxpayers earning less than $25,000 will save about $60 a year, while the top 1 percent, earning more than about $733,000 annually, would see a roughly $50,000 cut, or 3.4 percent of their after-tax income. Middle-income taxpayers, earning between $49,000 and $86,000, would see an average tax cut of about
$900.

“The basic story of the bill has remained the same since it was first introduced in early November,” Tax Policy Center analyst Howard Gleckman wrote. “Most households would get a tax cut at first, with the biggest benefits going to those with the highest incomes.”

Central to the legislation is a reduction in the corporate tax rate from 35 percent to 21 percent.

For individuals, the tax bill is mixed.  Rates will be lowered, including the new top rate of 37 percent, which will hit households earning $600,000 or more.

A bigger standard deduction, at $12,000 for single filers or $24,000 for couples, is intended to replace many popular write-offs.

The state and local tax deduction will be capped at $10,000, covering both income and property taxes. Mortgage interest deductions will be limited to loans of $750,000, rather than $1 million in current law, a change that is expected to ripple through housing markets in high-cost areas.

Other deductions that had been targeted for elimination were salvaged in last-minute negotiations between the House and Senate Republicans, including those for medical expenses, student loan interest and graduate student tuition waivers.

A child tax credit championed by Sens. Marco Rubio and Mike Lee, with backing from Ivanka Trump, will be doubled to $2,000.

The legislation will also repeal the Affordable Care Act’s mandate that all Americans carry health insurance, starting in 2019, by doing away with a tax on those who fail to have coverage.

US

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