Republicans finalized the most sweeping overhaul of the nation’s tax laws in three decades Friday, sweetening the child tax credit to placate a reluctant GOP senator as they pushed to muscle the bill through Congress next week and give President Donald Trump his first major legislative victory.
Sen. Marco Rubio, R-Fla., had been holding out for a bigger child tax credit for low-income families. After he got it, Rubio tweeted that the change is “a solid step toward broader reforms which are both Pro-Growth and Pro-Worker.”
Rubio spokeswoman Olivia Perez-Cubas said that meant he’d vote yes. Rubio’s support provided a major boost for Senate Republicans who are trying to hold together a razor-thin majority to pass the bill.
“I’m confident we’ll have the votes,” said Sen. Rob Portman of Ohio, one of the Republican negotiators on the bill.
Portman cast the bill as providing “the kind of middle-class tax relief that’s desperately needed right now. People are looking at flat wages and higher expenses, and this will help.”
Members of a House-Senate conference committee signed the final version of the legislation Friday, sending it to the House and Senate for final passage. They have been working to blend different versions passed by the two houses.
House Minority Leader Nancy Pelosi and House Speaker Paul Ryan clashed over the GOP tax plan that a conference committee is now considering on Capitol Hill. (Dec. 14)
The tax package would double the basic per-child tax credit from $1,000 to $2,000. The bill makes a smaller amount available to families even if they owe no income tax. Rep. Kristi Noem, R-S.D., said Friday that that amount had been increased to $1,400.
Rubio had said he wanted the earlier $1,100 figure increased.
Low-income taxpayers would receive the money in the form of a tax refund, which is why it’s called a “refundable” tax credit.
Senate Republicans passed their original tax bill by a vote of 51-49 — with Rubio’s support. If they lost Rubio, they would have been one more defection away from defeat
Rubio’s support came after a key faction of House Republicans came out in favor of the bill, increasing its chances. Members of the conservative House Freedom Caucus predicted the vast majority of their members would support the package.
House and Senate Republican leaders on Wednesday forged an agreement in principle on the most sweeping overhaul of the nation’s tax laws in more than 30 years. The package would give generous tax cuts to corporations and the wealthiest Americans — Trump among them — and more modest tax cuts to low- and middle-income families.
“I’m confident that at the end of the day, the Senate will approve this conference committee report because no one should be defending the status quo in this horrible tax code Americans have had to live with for too long,” said Rep. Kevin Brady of Texas, a top House negotiator.
The tax legislation would cut the top tax rate for the wealthiest Americans from 39.6 percent to 37 percent.
The package would nearly double the standard deduction, to $24,000 for married couples. But it would scale back the deduction for state and local taxes, allowing families to deduct only up to a total of $10,000 in property and income taxes. The deduction is especially important to residents of high-tax states such as New York, New Jersey and California.
The final package slashes the corporate rate from 35 percent to 21 percent, a big win for corporate America.
Business owners who report business income on their personal tax returns would be able to deduct 20 percent of that income.
The agreement also calls for repealing the mandate under the “Obamacare” health law that requires most Americans to get health insurance, a step toward the ultimate GOP goal of unraveling the law.
The business tax cuts would be permanent, but reductions for individuals would expire in 2026 — saving money to comply with Senate budget rules. In all, the bill would cut taxes by about $1.5 trillion over the next 10 years, adding billions to the nation’s mounting debt.
Rubio’s opposition had come at a bad time for Senate Republicans, with two of them missing votes this week because of illness.
John McCain of Arizona, who is 81, is at a Washington-area military hospital being treated for the side effects of brain cancer treatment, and 80-year-old Thad Cochran of Mississippi had a non-melanoma lesion removed from his nose earlier this week. GOP leaders are hopeful they will be available next week.
With Rubio onboard, GOP leaders finalize huge tax package. Sen. Marco Rubio had been holding out for a bigger child tax credit for low-income families.