The US Senate approved a $2.2 trillion debt increase that overhauls the federal tax system early Saturday morning following a day of procedural delays and partisan frustration.
The legislation, which would cut the top corporate tax rate to 20 percent, will ultimately raise taxes for many individual taxpayers, passed in a vote of 51-49.
Tennessee Republican Bob Corker was the only Republican to join all 48 Democrats in voting against the legislation, which is being promoted as a sweeping overhaul of the nation’s tax laws.
The vote is a significant victory for Republicans who have failed to fulfill a long list of campaign promises.
On Thursday, the official congressional score of the bill found that it would add $1 trillion in new debt over 10 years, while other estimates say the red ink could total more than $2.2 trillion.
“Tonight, lawmakers demonstrated that their top priority is satisfying the policy wants of the wealthy and the powerful,” said Alan Essig, executive director of the Institute on Taxation and Economic Policy. “Tax increases and loss of health care for millions of hardworking low- and middle-income families apparently are inconsequential collateral damage as long as well-heeled donors and corporations get their tax cuts.”
“It’s not too late to change course. But so far, Republican leaders have demonstrated that, for them, the only voices that matter in this debate belong to those who fund their campaigns,” said Essig.
The Tax Policy Center released an assessment that said, “In general, higher income households receive larger average tax cuts as a percentage of after-tax income, with the largest cuts as a share of income going to taxpayers in the 95th to 99th percentiles of the income distribution.”
The Tax Policy Center also said that “in 2027, taxes would rise modestly for the lowest-income group… and decrease for higher-income groups.”
In 2027, the richest one percent of Americans would receive an average tax cut of more than $9,000 while six out of ten income earners would face an average tax hike of $160.
Households that currently have income of $730,000 or more would receive 62 percent of the benefits under the Senate plan. According to the Joint Committee on Taxation, households making $75,000 or less would see their taxes increase on average in 2027.
The measure has also been widely compared to tax legislation approved prior to the 1929 stock market crash, which led to the Great Depression.
The GOP’s $1.5 trillion tax plan would trigger $150 billion in cuts to domestic programs every year for a decade under a decades-old “pay-as-you-go” law, which requires Congress to offset the cost of each piece of legislation or risk spending cuts painful to both parties.
The very large tax cuts for the richest households and big corporations included in the tax overhaul will necessitate spending cuts that adversely impact many working families. Among the biggest of these are a loss of health insurance for 13 million Americans and as much as $150 billion per year would be cut from initiatives ranging from farm subsidies to student loans to support services for crime victims.
Medicare alone could see cuts of $25 billion a year.
Senate Majority Leader Mitch McConnell was criticized for not allowing lawmakers adequate time to assess the consequences of the legislation but his only focus on corralling GOP lawmakers appeared to please wealthy Republican donors, who demanded action on tax cuts despite the political cost that will be paid when voters feel the pain imposed by this legislation.
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