On Thursday, November 16th, the House of Representatives passed the Tax Cuts and Jobs Act (H.R. 1) by a vote of 227–205. The House bill would cut the corporate tax rate, to 20 percent from 35 percent. It collapses the number of tax brackets to four from seven, switches the United States to an international tax system that is more in line with the rest of the world and eliminates or scales back many popular deductions, including one for state and local taxes.
It also roughly doubles the standard deduction that most taxpayers claim on their tax returns and increases the child tax credit to $1,600 per child from $1,000. The Senate bill, by contrast, increases the child tax credit to $2,000 per child and lowers the top marginal tax rate to 38.5 percent, from 39.6 percent. The House does not lower the top marginal tax rate for the wealthiest.
The Senate Finance Committee, after four days of debate, voted 14 to 12 along party lines to approve their version of the tax package late Thursday night. The approval helps clear the way for the full Senate to consider the bill after Thanksgiving, although it remains to be seen whether it has the support to pass the chamber.
Once bills have passed both the House of Representatives and US Senate, the two will have to be reconciled before a final bill is sent to President Trump.
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