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National Govt & Politics
Senate approves GOP tax bill, but one more House vote still needed
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Senate approves GOP tax bill, but one more House vote still needed

Senate approves GOP tax bill, but one more House vote still needed
Photo Credit: Jamie Dupree

Senate approves GOP tax bill, but one more House vote still needed

Sparring over tax cut plans after midnight, the Senate voted 51-48 to approve a sweeping package of Republican tax cuts for individuals and businesses, though a small rules detour in the Senate will force the House to vote one more time on Wednesday morning, as GOP leaders are ready to send President Donald Trump the first major overhaul of the federal tax system since 1986.

"I think what's at stake tonight in this vote is more than just a few changes in our tax code," said Sen. David Perdue (R-GA), as GOP Senators argued the tax cuts are part of a broader effort by President Donald Trump to jump start economic fortunes of American workers.

"Our economy needs a shot in the arm again, not just to improve the economy but to improve take home pay," said Sen. Rob Portman (R-OH), as Republicans rejected charges by Democrats that this bill was nothing but a boon to the rich.

Unlike a showdown vote over a GOP plan to overhaul the Obama health law, Democrats were unable to draw Republicans to their side to derail the tax plan, leaving them frustrated and powerless on the Senate floor, as they decried the details of the bill.

"We believe you're messing up America," said Senate Democratic Leader Charles Schumer of the GOP tax bill. "It's an absolute disgrace."

"The first thing is, this is not a middle class tax cut," argued Sen. Brian Schatz (D-HI), as Democrats charged the bill was nothing more than a bill written mainly by special interests.

"Down the hall 100 feet is Sen. McConnell's office," said Sen. Sherrod Brown (D-OH), who made the unusual move of opening the door to the Senate floor to make his point that the GOP plan had been bolstered by the work of lobbyists from a variety of industries.

While Democrats could not stop the bill, they were able to use the Senate rules to force minor changes under the restrictions of the "Byrd Rule," which limits what can be done in the Senate under the budget reconciliation process.

The procedural challenges knocked out fewer than 100 words, dealing with 529 savings accounts being used for K-12 education spending to support homeschooling, as well a new excise tax on college and universities.

Because of those minor changes, the bill must go back to the House for one more vote, which should take place by lunch on Wednesday.

That didn't dim the excitement of Republicans.

"I'm very proud to be a part of the Senate today, on what's going to prove to be a historic day in the future," said Sen. Johnny Isakson (R-GA). "There's a lot of naysayers who say this isn't going to work."

Some of the highlights of the GOP plan include:

+ Seven individual tax brackets of 10%, 12%, 22%, 24%, 32%, 35%, and 37%.

The current individual brackets are 10%, 15%, 25%, 28%, 33%, 35% and 39.6%.

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+ Standard deduction almost doubled $6,350/$12,700 to $12,000/$24,000

+ State and local taxes change will only allow you to deduct up to $10,000 for sales, income and property taxes - this is a big change for those who itemize.

+ Mortgage interest deduction limit lowered to $750,000 from $1 million. No change for current mortgages (they are grandfathered in).

+ Zeroes out the individual mandate tax penalty in 2019 under the Obama health law - note the date - not in 2018. Still in effect next year.

+ Does not change tax exemption on reduced tuition awards for graduate students, and employer tuition aid at colleges and universities.

+ Alternative Minimum Tax lives on for individuals, but the exemption limit is increased.

+ Federal estate tax is not abolished, but the plan doubles the amount of the inheritance exemption.

+ Corporate tax rate lowered to 21% - original plan was 20%.

+ Almost all business tax changes are permanent in the GOP bill.

+ Almost all individual tax changes in the bill expire after 2025 (8 years).

If you want to read more about the details of the bill, this is the 570 page explanation that has been put out by Republicans in the Congress.

Read More

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