The Senate has passed the Tax Cuts and Jobs Act bill, paving the way for President Donald Trump’s first big legislative victory.
The package would mark the biggest tax cuts since the 1980s. The bill was passed by 51 votes to 49, after a series of amendments in a marathon session.
Democrats complained the bill only benefited the wealthy and big business.
The plan sees a sharp cut in corporation tax, but a Senate committee finding has warned it would add $1trillion to the budget deficit.
Donald Trump wants the measures enacted by the end of the year and congratulated Republicans for taking the US “one step closer to delivering massive tax cuts for working families”.
The Senate will now have to merge its legislation with that passed last month by the House of Representatives, before it can be signed into law by the president.
Presiding over the Senate, VP Mike Pence declared the 51-49 victory to applause from Republicans in the early hours of December 2.
The new tax plan would see the corporate tax rate lowered from 35% to 20%, and include more modest tax cuts for individuals across income levels.
Following the vote, Senate Democratic leader Chuck Schumer said his opponents would pay the price at the ballot box in mid-term elections next year.
He said the measures would endanger social security and medical provision.
Republican Senate majority leader Mitch McConnell said the legislation would prove to be “just what the country needs to get growing again”.
The final draft of the Tax Cuts and Jobs Act bill went through several changes on December 1 in order to bring reluctant Republicans on board. Republicans have a 52-48 majority in the Senate.
Democrats were angry about the last-minute revisions, complaining that they had not been given enough time to digest the nearly 500-page document, with handwritten changes to the legislation.
Donald Trump has unveiled his tax plan, which would eliminate income tax for millions of Americans.
Wealthy Americans and businesses would also pay less in taxes under the Republican frontrunner’s plan.
Donald Trump’s plan would eliminate income tax for people earning less than $25,000 and married couples jointly earning less than $50,000.
The Republican presidential hopeful is coming under increasing pressure to outline specific policy goals beyond immigration reform.
Donald Trump has previously put out papers, outlining his positions on immigration and gun rights.
“It will provide major tax relief for middle income and for most other Americans. There will be a major tax reduction,” he said on September 28.
“It will simplify the tax code, it’ll grow the American economy at a level it hasn’t seen for decades.”
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About 43% of Americans already do not pay income tax, according to the Tax Policy Center.
About 31 million more Americans would fall under Donald Trump’s no-income-tax bracket, he said.
The economy would grow at least 3% a year under his plan, Donald Trump predicts.
On average the US economy grows 1 to 2% per year. Rival presidential candidate and former Florida Governor Jeb Bush had promised a 4% growth rate under his policy proposals.
Many economists had criticized Jeb Bush’s growth rate, calling it unreasonable.
He said the US would pay for the tax cuts without adding to the national debt through eliminating deductions and loopholes that have allowed some people, mostly wealthy ones, to save money on taxes.
“In other words, it’s going to cost me a fortune,” he said.
Under his plan, the highest individual tax rate would be lowered to 25% of income from the highest rate now, 39.6%.
The plan would also put a 10% tax on overseas profits and put a tax on overseas earnings, which now can be deferred.
It would lower the tax rate on businesses to 15% from 35%.
The so-called “death tax”, in which the US government charges certain wealthy individuals to transfer the high-valued property of a deceased person to someone as outlined in a will, would also be eliminated under Donald Trump’s plan.
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