House and Senate Republicans reached a deal on the final version of a tax reform bill on Dec. 13, clearing the way for the party to deliver a tax overhaul before Christmas. Votes on the final bill could start as early as Dec. 18.
“Congress has reached an agreement on tax legislation that will deliver more jobs, higher wages, and massive tax relief for American families and for American companies,” said President Donald Trump during his speech on tax reform at the White House on the afternoon of Dec. 13.
“If Congress sends me a bill before Christmas the IRS—this is just out, this is breaking news—has just confirmed that Americans will see lower taxes and bigger paychecks beginning in February,” he said.
If passed by both chambers, it will be the first major legislative effort of the Trump administration to pass Congress, and the biggest tax code rewrite since the Reagan years.
The agreement reduces the corporate tax rate from 35 percent to 21 percent, which is higher than the 20 percent included in the original House and Senate tax bills. The rate cut will take effect in 2018, rather than 2019, as the Senate bill originally proposed.
The agreement reduces the top individual tax rate from 39.6 percent to 37 percent, according to a Wall Street Journal report. That is slightly lower than the top rate in each of the original bills. The agreement also eliminates the corporate alternative minimum tax (AMT).
The Dow Jones Industrial Average hit a new record high, nearing 25,000 following news that Republican leaders reached a tax reform deal.
“We’ll have very little Democrat support, probably none. That’s purely for political reasons,” Trump said.
“Fifty-five years ago this week President John F. Kennedy—a Democrat—launched an effort to pass sweeping top-to-bottom tax cuts,” he said and added that lowering taxes is a bipartisan idea.
“As a candidate, I promised we would pass a massive tax cut for the everyday, working Americans who are the backbone and heartbeat of our country,” Trump said. “Now we are just days away from keeping that promise and delivering a truly amazing victory for American families.”
“We want to give you the American people a giant tax cut for Christmas. And when I say giant, I mean giant.”