VIDEO – The Senate voted, 51 votes to 49, for a version of the law that should reduce taxes for businesses and individuals. On his account...
VIDEO – The Senate voted, 51 votes to 49, for a version of the law that should reduce taxes for businesses and individuals. On his Twitter account, the US president said he was "looking forward" to enacting the reform.
In the early morning of Saturday, an important step was taken in Washington by the tax reform of Donald Trump. The Senate passed, 51 votes to 49, a version of the law that should reduce the taxes businesses and individuals. President Trump has never been closer to delivering on his big campaign promise of tax overhaul.
The last major tax reform dates back to 1986 under Ronald Reagan. It will now be necessary for the text adopted by the upper house to be harmonized with that already voted a few days ago by the House of Representatives. This exercise called "reconciliation" must take place by Christmas, so as to present, on the desk of Donald Trump for his signature, the first major law of his mandate. This Saturday, the American president welcomed the adoption of the project. "We've come one step closer to delivering massive tax cuts to working families across America," he wrote on his Twitter account. Looking forward to signing a final bill before Christmas”.
The Republicans who have a narrow majority in the Senate have practically remained united. Thanks to last-minute haggling, the centrist elected officials, with one exception, followed Mitch McConnell, the Republican leader of the senate. Bob Corker, senator from Tennessee, is the only Republican to have voted with the 48 Democrats. He judges that the text painfully elaborated in an emergency will worsen the budget deficit.
In fact, by lowering the tax on corporate profits from 35% to 20% from 2019 and by reducing personal income taxes, the Republicans supposed to embody budgetary discipline, eliminate some 1500 trillion dollars of tax revenue over 10 years. According to the commission responsible for calculating the impact of the laws on federal finances, the surplus growth resulting from the tax cuts will only compensate for a third of this shortfall for the Treasury.
No obligation to take out private health insurance
By easing the tax on corporate profits, the Republicans think they will encourage multinationals to repatriate a good part of their approximately $2000 trillion in profits made abroad, which could boost Treasury revenues in the short term. The text also provides, in practice, to exempt future profits made abroad by American companies from taxes.
Democrats all voted against the text, arguing that it was essentially a tax giveaway to the wealthy and corporations. They also protested, in vain, against the secret and nocturnal negotiations which allowed certain hesitant senators to add provisions dear to their lobbyist friends, in order to rally to the final project.
The obligation for Americans to take out private health insurance if their employer does not provide it has been eliminated in passing. It's a stab at “Obamacare”, Barack Obama's great health reform. This will certainly save high costs for individuals close to retirement whose premiums have increased massively in recent years. On the other hand, this provision will encourage the youngest, often those who are in better health, not to take out insurance. The result will be a deterioration in the quality of the pool of insured persons, which will drive up the premiums of older people in less good health.
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Source: © Tax reform: Donald Trump almost keeps his big promise