Update: Dec. 20, 10:00 a.m.: The House has passed the tax bill for a second time sending the bill to be signed by the President.
Update: Dec. 19, 10:05 p.m.: The Senate has passed the tax bill with a 51-48 party-line vote. Sen. John McCain(R-AZ) was not present to vote on the bill as he is currently receiving cancer treatments. The bill is expected to be passed by the House again on Wednesday morning and be signed by President Trump.
Update: Dec. 19, 2:15 p.m.: Minor provisions in the bill passed by House Republicans must be changed to follow Senate rules in order to be passed. The changes to the bill mean that the House must again vote on the bill after it is voted on in the Senate. The new vote is expected to take place on Wednesday morning.
With a 227-203 vote, the House of Representatives has passed that first major rewrite of tax law in the last three decades. The entire House Democratic caucus voted no against the tax bill. Joining the Democrats, 12 Republicans joined in opposing the tax bill. Two California Republicans, Rep. Darrell Issa(R-Oceanside) and Dana Rohrabacher(R-Huntington Beach), were among the Republicans who opposed the bill. Both Issa and Rohrabacher said that the bill did not do enough to lower taxes for their constituents.
With the bill passing through the House, the Senate is expected to vote on the bill this evening despite calls from Democrats for a delay until Senator-elect Doug Jones(D-Al) can be properly sworn in as senator. However, it's unlikely Jones will be seated before January due to a mix of Alabama state law and the Senate's holiday recess. Thus the Senate bill will likely be voted on before Jones is able to replace Republican Luther Strange who was appointed to the seat and lost the Republican primary to Roy Moore. This keeps Republicans with a 52-48 advantage in the Senate.
But what's in the bill and how will it affect the people? Let's break it down.
Tax Cuts for Corporations, Not So Much for the Middle Class
The corporate income tax will be cut from 35 percent to 21 percent. Meanwhile, the top tax rate for individuals would drop from 39.6 percent to 37 percent. The large tax cuts for corporations has been at the center of the Democrats' arguments that the bill does more for the wealthy than it does for the poor and middle classes. As well, even though most people will receive some tax relief under the bill the individual cuts would expire in 2026 leading to increased taxes for Americans making under $75,000. Meanwhile, corporate cuts would remain in place.
Increases in the Debt
Of course, massive tax cuts mean less money for the government to spend and use to pay back its debt. The tax bill is estimated to add $1.46 trillion to the national debt. That number would go even higher if the tax cuts were extended by a future congress pass their expiration in 2026.
Repeal of Obamacare Individual Mandate
The tax bill also includes a repeal of the Obamacare individual mandate. The mandate requires everyone to purchase health insurance in order to reduce premiums across the board. The repeal would add more costs to the poor and middle class in need of health care as premiums would begin to rise as people starting to pull out of the health insurance markets.
Capping State and Local Tax Deductions
Currently, taxpayers are able to deduct what they paid in state and local taxes from their federal taxes. However, the GOP tax bill would cap these deductions at $10,000 which would increase taxes in states with states like California and even more in cities like Los Angeles. This cap on state and local deductions is what led to opposition from Issa and Rohrabacher.
When the tax bill is voted on in the Senate it is expected that every Democrat will vote against it. This means that the bill can be stopped if three Republican senators side with Democrats in opposing the bill. However, no Republicans have expressed opposition to the bill.
California's Sen. Dianne Feinstein and Sen. Kamala Harris, both Democrats, have expressed strong opposition to the tax bill.