The Republican-led Congress on Tuesday passed a sweeping overhaul of U.S. tax laws, but not before some tax experts and tax advocates complained that the legislation was still too light on details to make a dent in the nation’s $4.4 trillion federal deficit.
President Donald Trump signs an executive order in the Oval Office of the White House on Feb. 25, 2021.
The White House says the administration will be working closely with the House of Representatives and Senate to pass the tax legislation.
(Photo: Evan Vucci, AP)The sweeping rewrite of the nation�s tax laws passed by the Senate and the House on Tuesday would give a boost to businesses and investors who already have benefited from a temporary tax cut.
The legislation would reduce the top tax rate from 39.6% to 35%, raise the child tax credit and phase out the alternative minimum tax, all of which are scheduled to expire at the end of the year.
The bill also would make a $10,000 gift to children and families with dependents for a year and a $500 credit for people who work with children.
It also would eliminate the state and local tax deduction, the mortgage interest deduction and the estate tax.
The legislation includes the largest changes to the tax code since the 1986 tax overhaul and comes as Trump and Democrats in Congress look to pass a budget blueprint that could be finalized in the coming weeks.
As the House passed its tax bill Tuesday, the Senate voted 81-28 to begin debate on the measure.
The vote was 52-46 in favor of the bill, with Republican Sens.
Mike Lee of Utah and Thom Tillis of North Carolina voting against the bill.
Tillis and Lee are the only two senators to vote against the tax bill.
The tax bill also includes an extension of an emergency funding measure that Congress approved last month in the wake of the devastating hurricane that hit the East Coast.
The measure will fund the government through March 19.
Senate Minority Leader Chuck Schumer of New York and other Democrats said they were concerned that the bill would not provide the $5.4 billion in funding that was requested in last month�s emergency measure.
Schumer said in a statement, “The president, Vice President Pence, and their party-line allies in the House have made it clear that their tax bill will do nothing to help families and small businesses.”
The White House said Tuesday that the tax measure will help close loopholes and simplify the tax system.
It also said that the $1.6 trillion measure will reduce the deficit by $1 trillion over 10 years.
The administration has made it a priority to close loopholes, and the administration is currently working with Congress on a package to achieve this goal.
It will also help small businesses avoid taxes and help the middle class, the White Court said.
But tax experts said they had mixed feelings about the bill.�It is not good enough for the president to call this a win,� said Larry Kudlow, president of the Tax Policy Center, a think tank that has been studying the bill for months.�We know that a lot of the tax cuts that the president campaigned on, especially on the corporate side, were not going to be there.
They were going to hurt people.�Kudlow said that Republicans in the Senate have not included enough language in the legislation that would ensure that taxpayers are not left paying more in taxes than they earn.
The White Court has also said the tax plan will help middle-class families and low-income Americans, including those who earn $50,000 to $100,000.
It would also benefit businesses that have invested in research and development.
The Senate passed the bill in a 52-48 party-lines vote, with all Democrats opposed.
Republicans have said they have been working with Democrats to hammer out details and speed up debate on tax legislation since they took control of Congress in the summer.
They say they are committed to working with the White Houses office of tax policy, which they believe would be able to quickly craft legislation to get it done.
The House is scheduled to vote on the tax-reform legislation in the early hours of Wednesday morning.
The Senate is expected to vote later in the day.