The US House of Representatives on November 16 voted 227 to 205 to pass the ‘Tax Cuts and Jobs Act’ (HR 1). There were 13 Republicans who voted against the legislation. The bill proposes to lower business and individual tax rates, modernize US international tax rules, and simplify the tax law, with significant impacts on numerous sectors of the economy.
Meanwhile, the Senate Finance Committee is continuing to consider a version of tax reform based on legislation proposed by Finance Chairman Orrin Hatch (R-UT). The tax reform proposals being considered by the Finance Committee differ in key aspects from the House-approved bill.
The Finance Committee plans to complete action on its bill this week. The full Senate then would be expected to debate and consider amendments to the Finance Committee-approved tax reform bill during the week of November 27, following Congress’ Thanksgiving holiday recess week.
Once the Senate has approved its tax reform bill, the two chambers must reconcile differences between the two bills and then vote to pass a final bill in identical form before tax reform legislation can be signed into law by President Trump.
House passage of the ‘Tax Cuts and Jobs Act’ tax reform package is a significant achievement a mere two weeks after the bill was first released. There continue to be many steps that need to be completed before Congress can enact a reform of US tax law providing a more competitive tax system for business taxpayers and improved economic opportunities for individuals and families.
Stakeholders should remain engaged in the legislative process as Congress works to enact tax reform intended to boost US competitiveness and productivity through lower business tax rates, a modernized international tax system, and incentives to invest in the United States.