By Matt Fuller and Arthur Delaney
The House will have to revote on the bill after the Senate passes a corrected version.
After years of false starts and failed promises, House Republicans had another one Tuesday ― they passed a tax bill with provisions that were struck down by the Senate parliamentarian.
Even though House Republicans already congratulated themselves in a series of speeches, the House will have to vote again on Wednesday, after the Senate passes the final tax bill. House Republicans had passed what they thought would be the final tax proposal on Tuesday 227-203, with 12 Republicans voting no.
But now the Senate will send back to the House a similar bill ― with the stricken provisions omitted ― before the tax legislation will go to President Donald Trump for his signature.
It’s a small gaffe, but one typical of this process. Republicans rushed a bill to the floor and ended up embarrassing themselves.
Still, this hiccup is just a formality. The bill will almost certainly pass the Senate, where it is expected to come up for a vote late Tuesday night or early Wednesday morning, and then clear the House with the same members voting for and against it.
The bill is, without a doubt,
Trump and the GOP Congress’ most significant legislative achievement since Republicans gained control of the House, Senate and White House.
But the “win” may end up costing Republicans. This bill is far from the congressional victory Republicans had sought to run on during next year’s midterm elections: It’s deeply unpopular, with approval ratings that were already significantly underwater and grew worse over the past few weeks as the legislation neared final passage.
A CNN poll in November showed 31 percent of voters viewing the tax bill favorably, with 45 percent opposing it. A poll conducted in the past week showed 33 percent supporting the bill, but 55 percent now against it.
When Senate Republicans passed their initial version of the measure just a few weeks ago, many Republicans didn’t care that the bill wasn’t popular. Republicans simply believed the lack of support was due to bad polling and voters not fully understanding the proposal.
Likewise, Speaker Paul Ryan (R-Wis.) told reporters Tuesday morning that he had “no concerns whatsoever.”
“I got to say, if people are out there on TV telling mistruths, disguising the facts of this thing, that’s going to make it unpopular,” Ryan said, adding that taxpayers will be happy when they see changes in their pay next year ― both from adjustments to taxes withheld from their paychecks and higher pay from booming business conditions.
But the facts of this bill are what make it unpopular. For one, the bill repeals the individual mandate in Obamacare, which would result in higher prices for people relying on Obamacare for health insurance. And far from a “middle-class tax cut,” as Trump and other Republicans promised, the measure is truly a massive corporate tax cut ― the top rate goes down from 35 percent to 21 percent ― and a smaller tax cut for individuals in the seven individual income brackets.
Independent analysts have said wealthy taxpayers would benefit the most, in large part because they pay more taxes from the start. But households at every income level would see a tax cut next year, according to an analysis of the conference bill from the Joint Committee on Taxation, which scores tax legislation for Congress.
Starting in 2021, however, some income groups would start seeing slightly higher rates. And because the proposal sets most individual cuts to expire in eight years ― a budget gimmick to reduce the bill’s cost in a 10-year budget window ― all households earning less than $75,000 would see higher taxes in 2027 (due in large part to the bill including an unfavorable permanent change to the way tax brackets are indexed to inflation)
Republicans have waved off concerns about the sunsetting tax cuts by saying a future Congress won’t let them expire. That’s a change from Ryan’s position earlier this year, when he insisted the cuts be permanent. In the end, Ryan got half his way ― the corporate tax cuts are permanent, but the individual reductions are not.
Republicans finance these cuts, in part, by raising taxes on some people. The bill ends much of the state and local tax deduction, which lets filers write off the cost of their local taxes. As a compromise to some of the high-tax states most affected, the bill allows filers to deduct up to $10,000 of their local taxes by some combination of their choice. But that won’t be enough for many high-income people in states like New Jersey, New York and California.
As with an earlier version of the bill, a number of Republicans from New Jersey and New York voted against the legislation, though most California Republicans still got onboard.
Republicans chose a policy approach that came with a built-in political headache: They have been unable to guarantee that no household would face higher taxes under the plan even as it piles on all that debt.
If their bill simply cut tax rates, everybody would benefit. But because of the way the bill lowers rates while eliminating deductions ― thereby exposing more income to taxation in some cases ― Republicans have been unable guarantee a tax cut for everybody. So even though most households would be better off under the changes next year, some will be worse off.
Still, the majority of the bill is “paid for” by increasing deficits. The measure would add $1.4 trillion to the national debt, the Joint Committee on Taxation said. Republicans have claimed that increased economic growth would boost business receipts and offset the revenue loss, though no credible economic analysis has shown that.
Republicans have largely ignored those criticisms by just focusing on how the tax cuts would boost the economy. They’ve also largely looked past the effects on housing, charitable giving and state budgets.
Those effects flow from a simplification of the tax code. The legislation would increase the standard deduction from $12,700 to $24,000 for a married couple (an increase Republicans have falsely characterized as “doubling” the deduction). Currently, only about 30 percent of households find it worthwhile to “itemize” for expenses such as mortgage interest, charitable donations and local taxes. With the bigger standard deduction, experts say only 5 percent would.
While their tax filing process would be simpler, for many households, the tax incentive to take out a bigger mortgage or donate to charity would be smaller, which could squeeze housing markets and the nonprofit sector. And a new cap on the amount of local taxes that can be deducted would put pressure on state lawmakers to either reduce those taxes ― resulting in less revenue for priorities like public education ― or shift them to other sources that are still deductible, such as business payrolls.
“Don’t be a high-tax state,” Rep. John Shimkus (R-Ill.) said after the vote. “Be a low-tax state “
According to Sen. Ron Wyden (D-Ore.), the Senate parliamentarian said three provisions were ineligible for the fast-track process, including one measure allowing parents to use special 529 savings accounts for home-schooling expenses.
“In the mad dash to provide tax breaks for their billionaire campaign contributors, our Republican colleagues forgot to comply with the rules of the Senate,” Wyden and Sen. Bernie Sanders (I-Vt.) said in a joint statement.
The lead House author of the bill, Rep. Kevin Brady (R-Texas), has said he expects Congress will need to pass another bill next year to fix any mistakes in the tax bill.
![A man points at his house destroyed by air strikes in Sanaa. Destruction in the Yemeni capital is everywhere: houses, health centres, wedding halls, and even children's playgrounds have been targeted by the raids. [Karl Schembri/NRC/Al Jazeera]](http://www.aljazeera.com/mritems/Images/2017/12/19/52b92c57f3f54f34a60c26cac3317f3c_8.jpg)
![A man walks by civilian houses destroyed in Sanaa. [Karl Schembri/NRC/Al Jazeera]](http://www.aljazeera.com/mritems/Images/2017/12/19/8639392875ba448e9a12a15c282dad05_8.jpg)
![Ali Mothana Ali, 50, from al-Dhalea, was seriously wounded when his house was hit. "The air strike that hit my house, it caught me just outside my home. Shrapnel from the explosion hit me. I sustained facial injuries, splinters had to be extracted from my pelvis, and metal sliced off part of my leg. I survived because neighbours rushed me to a nearby village for treatment. With my injuries, I am disabled. I cannot work to feed my children. I am the only bread winner for my family, my oldest son is 10 years old." [Nuha Mohammed/NRC/Al Jazeera]](http://www.aljazeera.com/mritems/Images/2017/12/19/37a2031d14114aef9414885ab8ad1913_8.jpg)
![Fighting has also been fierce outside of Sanaa, displacing up to three million Yemenis across the country. Molok, from Saada, had to flee with her children and grandchildren together with 460 families when their neighbourhood was bombed more than two years ago. She has been living in an informal settlement in Houth ever since. [Alvhild Stromme/NRC/Al Jazeera]](http://www.aljazeera.com/mritems/Images/2017/12/19/2ed924eb1ec2430fbdba6f3179f0563c_8.jpg)
![Only a photograph and a lot of rubble is what remains of Omar's former home in Taiz. "It took me 10 years to build this house, stone by stone, to make sure my children have a roof over their heads. It was gone in a blink." In late 2015, armed groups ordered him to leave; his village had become a battleground. Omar and his family fled the house just days before it was leveled by air strikes. [Nuha Mohammed /NRC/Al Jazeera]](http://www.aljazeera.com/mritems/Images/2017/12/19/51f7ee57791349789df4a159657e0943_8.jpg)
![Mahmoud Zeid and his wife Sabah speak of the day they fled their home in July 2015, following an air strike close to their neighbourhood in Jabal al-Nugm. Mahmoud used to work as a tailor, but since the war and blockade started he no longer has a job. Sabah suffers from kidney failure. They have six children. NRC provides them with food aid in a project funded by the UN's World Food Programme. Mahmoud said: "We have to survive. There is no food, no spending money like there used to be. We get a plate or two of food and get on with it. Even then we don't even have cooking gas." [Karl Schembri/NRC/Al Jazeera]](http://www.aljazeera.com/mritems/Images/2017/12/19/26289f990654412faf4f8d2ddcc69ce7_8.jpg)
![Wedad is a single mother with four children from Amran. She says the dramatic hunger and poverty she's been pushed into makes her prefer to die. "I pray God, please let us die or solve this, or let us die silently - that people would wake up in the morning and find us dead. It cannot be worse than what we have been through already. We felt the hunger, we felt the cold, we have been through everything." [Nuha Mohammed/NRC/Al Jazeera]](http://www.aljazeera.com/mritems/Images/2017/12/19/059f1a2543474a728ba4d1f9767b671e_8.jpg)
![Amani, 12, from Taiz lost her father and has been displaced ever since. "The clashes got intense and we were the last family to escape from the village. We fled to a safer place and knew our father was a little way behind us when a shell hit and killed him. He died on the spot but we did not know. We kept calling his phone but got no answer and only later we heard he was dead. Everything is bad about fleeing your home: here there is no water, no firewood, we have nothing. Back home we had everything. I used to go to school, but now I cannot. I am afraid of the war; the scariest thing is hearing the bombs, the shotguns and the shells. We were terrified. We were hiding in our room and fearing death." [Nuha Mohammed/NRC/Al Jazeera]](http://www.aljazeera.com/mritems/Images/2017/12/19/b7df854cb57a43c1bf712e515e778fcd_8.jpg)
![Ahlam, 4, has spent two years in an informal settlement outside Houth in northern Yemen, living in extremely dire conditions. Her family fled from Saada in 2015 after their neighbourhood came under attack. [Alvhild Stromme/NRC/Al Jazeera]](http://www.aljazeera.com/mritems/Images/2017/12/19/1fb34f0731fc4f4ea50662bf92a648e6_8.jpg)
![In this settlement outside Houth, Obaid, 9, (left) and his friend Modrek collect empty plastic bottles to sell for recycling. "If we collect one full, large bag, we get 150 Yemeni rials [US$0.60]," said Obaid. "I used to go to school. I like studying. But there is no school here." As the war continues, millions of children in Yemen, a country where only 60 percent of the population could read and write before the war, are deprived of an education. [Nuha Mohammed/NRC/Al Jazeera]](http://www.aljazeera.com/mritems/Images/2017/12/19/602d675d5fb14bbd8c924501e620bc2b_8.jpg)
![The crisis in Yemen is brutal on children, many of whom are dying of starvation and acute malnutrition. Amani is a five-month-old baby weighing only 2kg. Here she is in the malnutrition section of al-Sabeen Hospital in Sanaa. "Our neighbours gave us money to take Amani to the hospital," her mother Fatima said. "I’m so worried that once we're out of here we won't find enough food for my baby." [Nuha Mohammed/NRC/Al Jazeera]](http://www.aljazeera.com/mritems/Images/2017/12/19/cba0a52da21c4e6c963735ae48aaf0bf_8.jpg)
![Mohammed's family travelled by road for close to 15 hours through several checkpoints to reach al-Sabeen Hospital with their malnourished child. "We had no choice, there are no functioning facilities in our area now," his father Waheeb said. "There is nothing." At two years of age, Mohammed weighs 5.9kg and cannot sit unassisted. [Nuha Mohammed/NRC/Al Jazeera]](http://www.aljazeera.com/mritems/Images/2017/12/19/36f90800cfbe4c0a8234439d278ba719_8.jpg)
![One-year-old Fatima weighs 4.2kg. She was brought to al-Sabeen Hospital by her mother when she became unwell and developed a fever and has since been receiving care for acute malnutrition. Fatima is one of four children but failing to thrive like her older siblings. A collapsing economy and impediments to the movement of humanitarian supplies have left millions of Yemenis in urgent need of life-saving aid and protection. [Nuha Mohammed/NRC/Al Jazeera]](http://www.aljazeera.com/mritems/Images/2017/12/19/bc77014693464ea3894eacb68e529adf_8.jpg)
![Yemenis queue at a food voucher distribution point in Sanaa. The Norwegian Refugee Council is helping some of the hardest-hit families with food vouchers and other assistance. A staggering 8.4 million Yemenis are now close to starvation after 1,000 days of war and a blockade of food, fuel and medicine. [Karl Schembri/NRC/Al Jazeera]](http://www.aljazeera.com/mritems/Images/2017/12/19/e045ede61b324a7ab1cebb9eab9c9147_8.jpg)
![Dr Zikra Abdullah Saif works at al-Sabeen Hospital in Sanaa. "Our tragedy now is that we cannot do our job the way we should, while we are struggling for our basic food. If the war continues and we keep being unpaid, we will have to flee to the villages. We will bring water from the well, plant, and live a simple way of life. We'll have to flee from the cities and live like people did in primitive times." [Karl Schembri/NRC/Al Jazeera]](http://www.aljazeera.com/mritems/Images/2017/12/19/a4f9550f7803415ba2551049923b95ce_8.jpg)
