President Donald Trump celebrated passage of a $1.5 trillion tax bill that cleared Congress on Wednesday afternoon without a single Democrat in support.
“I promised the American people a big, beautiful tax cut for Christmas. With final passage of this legislation, that is exactly what they are getting,” Trump said in a statement after the House voted 224-201 to pass the bill that would overhaul federal tax policy for the first time in decades. The Senate voted, 51-48, early Wednesday morning for it.
The Connecticut delegation — all Democrats — voted against the bill that they described as more of a lump of coal than a gift to most American families.
“This tax cut makes the Grinch and Mr. Potter from It’s a Wonderful Life look humane,” said Representative John Larson. “The gutting of the Medicare program to pay for tax cuts to millionaires and billionaires is both cruel and deceitful.”
Trump invited Republican lawmakers to the White House Wednesday afternoon to celebrate their political victory. Trump is expected to sign it into law once it is officially transmitted to him.
Aside from Democrats, a dozen House Republicans mostly from New York, New Jersey, and California voted against the tax bill because it limits a deduction for state and local taxes — a complaint also raised by Connecticut lawmakers.
Once signed into law, the bill will permanently drop the corporate tax from 35 percent to 21 percent, lower tax rates paid by individuals and restructure deductions to encourage more individuals to claim a beefed-up standard deduction. Most households would get a tax cut in 2018 but the wealthy would receive the largest benefits. The corporate cuts are permanent but those for individuals expire in 2026.
Unlike earlier versions of the bill, the final deal keeps deductions for medical expenses not covered by insurance, interest paid on student loans, and the $7,500 tax credit for electric vehicles. It also repeals the “individual mandate” under Obamacare requiring Americans to carry health insurance or face a tax penalty. And, it opens Alaska’s Arctic National Wildlife Refuge to oil and gas drilling.
The tax plan is projected to add nearly $1.5 trillion to the federal deficit over the next decade.
Republicans say the tax overhaul will encourage businesses to invest and expand, resulting in a more robust economy that will create jobs and raise wages.
“By cutting taxes and reforming the broken system, we are now pouring rocket fuel into the engine of our economy. America is back to winning again, and we’re growing like never before. There is a great spirit of optimism sweeping across our land,” Trump said.
Democrats say the legislation would blow a hole in the deficit, raise health insurance premiums, and may eventually lead to higher taxes on the middle class and drastic cuts to Medicare and Social Security.
“This isn’t tax reform. This is a giveaway to the rich and powerful. It gives mind blowing, massive tax cuts to the wealthy, and throws crumbs at working people while quietly doubling everybody’s health insurance premiums over the next seven years,” Senator Chris Murphy said. “And Republicans have already started using the trillion-dollar deficit this bill creates as an excuse to start slashing funding for the things Americans need — schools, roads, Social Security and Medicare.”
Several partisan and non-partisan think tanks have analyzed the complicated legislation.
The Tax Policy Center says higher income households would reap the greatest benefits although all income groups would, on average, see lower taxes between 2018 and 2025. After that, a majority would see their taxes rise as the tax cuts for individuals expire.
The Tax Foundation says that the tax changes would lead over the long term to a 1.7 percent increase in GDP, a 1.5 percent increase in wages and add 339,000 jobs.
The Federalist Society argues that the bill provides middle-income families with significant savings as well as simplifying the filing process — and says lowering business taxes will create jobs and improve economic growth.
American Progress says repealing the Affordable Care Act’s individual mandate would raise premiums by 10 percent in 2019 and leave 13 million fewer people with health insurance by 2025. They also note that the non-partisan Congressional Budget Office projected a similar bill would result in $25 billion in cuts to Medicare in 2018.
Here’s what the Connecticut delegation had to say:
“I’ll fight like hell to make sure Washington doesn’t use this awful tax bill as an excuse to gut the Medicare and Social Security benefits that Connecticut residents rely on,” said Murphy.
“This tax bill is an abomination. Tonight, Congressional Republicans revealed their true selves: partisan zealots who care more about political promises to their wealthy donors than the lives of the people they are elected to represent,” said Senator Richard Blumenthal.
“This final tax bill is even worse than we feared — it lowers the tax rate for the wealthiest people even more than either of the original bills — while repealing a key element of the Affordable Care Act, which will result in premium increases and 13 million people losing their insurance. Where are our values?” said Representative Rosa DeLauro.
“This plan will add $1.5 trillion to the deficit, which will trigger an automatic cut of $25 billion to Medicare next year. The Republicans’ ultimate end game is to further decimate essential safety net programs, like Medicare, Medicaid, and Social Security,” said Larson.
“This bill was the quintessential backroom deal. It was rushed through Congress in record time without a single public hearing and with no testimony from outside experts about how it will affect our economy and our future. I believe that the more Americans come to learn about what was contained in this bill, the more they will come to understand the extent of the harm it will do to our nation,” said Representative Joe Courtney.
“We were promised that working Americans would keep more of their hard-earned dollars. Instead, a majority of the American people — and especially families in Connecticut — will see their taxes ultimately increase under this plan. In fact, Connecticut is the state most likely to be hurt by this bill,” said Representative Elizabeth Esty.
“Real reform doesn’t explode our deficits by trillions or benefit the wealthy over the working and middle class. It doesn’t punish working families with steeper health insurance cost or punish people from certain regions of the country. And it doesn’t leave families with massive uncertainty a few years down the road,” said Representative Jim Himes.