WASHINGTON (Reuters) – The US Senate narrowly approved a tax overhaul on Saturday, moving Republicans and President Donald Trump a big step closer to their goal of slashing taxes for businesses and the rich while offering everyday Americans a mixed bag of changes.
In what would be the largest change to US tax laws since the 1980s, Republicans want to add $1.4 trillion over 10 years to the $20 trillion national debt to finance changes that they say would further boost an already growing economy.
Trump, speaking to reporters as he left the White House for New York hours after the pre-dawn vote, praised the Senate for passing “tremendous tax reform” and said “people are going to be very, very happy”.
Once the Senate and House of Representatives reconcile their respective versions of the legislation, he said, the resulting bill could cut the corporate tax rate from 35 per cent “to 20 (per cent). It could be 22 (per cent) when it comes out. It could also be 20 (per cent).” US stock markets have rallied for months on hopes that Washington would provide significant tax cuts for corporations.
Celebrating their Senate victory, Republican leaders predicted the tax cuts would encourage US companies to invest more and boost economic growth.
“We have an opportunity now to make America more competitive, to keep jobs from being shipped offshore and to provide substantial relief to the middle class,” said Mitch McConnell, the Republican leader in the Senate.
The Senate approved their bill in a 51-49 vote, with Democrats complaining that last-minute amendments to win over skeptical Republicans were poorly drafted and vulnerable to being gamed later.
“The Republicans have managed to take a bad bill and make it worse,” said Senate Democratic leader Chuck Schumer. “Under the cover of darkness and with the aid of haste, a flurry of last-minute changes will stuff even more money into the pockets of the wealthy and the biggest corporations.”
No Democrats voted for the bill, but they were unable to block it because Republicans hold a 52-48 Senate majority.