The United States House of Representatives on Thursday approved a major overhaul of business and personal income taxes, in a legislative victory for President Donald Trump, AP reported. The Republican Party-controlled House approved the bill by a margin of 227 to 205. At the US Senate, a finance committee voted 14 to 12 on a similar package.
The bill proposes to cut the corporate tax rate from 35% to 20% and reduce personal levies for several taxpayers. The US federal deficit is projected to grow by $1.5 trillion (around Rs 97 lakh crore) as a result of this tax overhaul.
“Now the ball is in the Senate’s court,” Vice President Mike Pence said. The Republican Party controls the US Senate by a thin margin of 52 to 48. Thirteen Republicans voted against the bill in the Lower House. At least five Republican senators have not declared support for the bill yet, and one has voiced his opposition to it.
“The next few weeks are going to be vitally important, and they’re going to be a challenge,” Pence told a conservative Tax Foundation dinner in Washington DC. “We’re going to get it done before the end of the year. However, with some Republican opposition, party senators hope to send a compromise bill to Trump for approval by Christmas.”
Democrats said the new plan will disproportionately help the wealthy and increase tax rates for millions. House Minority Leader Nancy Pelosi said the reform is “pillaging the middle class to pad the pockets of the wealthiest and hand tax breaks to corporations shipping jobs out of America”.