The U.S. House of Representatives approved a package of tax cuts affecting businesses, individuals and families on Thursday, moving Republicans and President Donald Trump an important step closer to the biggest tax code overhaul in a generation.
The largely party-line 227-205 vote shifted the tax debate to the U.S. Senate, where that chamber's separate plan has already encountered resistance from some Republicans. No decisive Senate action was expected until after next week's Thanksgiving holiday.
Trump, who is looking for his first major legislative win since he took office in January, went to the U.S. Capitol just before the vote to urge Republicans to pass the tax measure, which Democrats call a give-away to the wealthy and businesses.
"Passing this bill is the single biggest thing we can do to grow the economy, to restore opportunity, to help these middle-class families that are struggling," House Speaker Paul Ryan told lawmakers before the vote.
Congress has not thoroughly overhauled the sprawling U.S. tax code since Republican Ronald Reagan was president. The House measure is not as comprehensive as Reagan's 1986 sweeping package, but it is more ambitious than anything since then.
Its path forward in the Senate, where Republicans have a narrow majority, is fraught with political obstacles involving the federal deficit, healthcare and the distribution of tax benefits. Republicans can lose no more than two Senate votes.
Senate Republican tax writers made the risky decision to tie their plan to a repeal of the mandate for people to get healthcare insurance under former President Barack Obama's Affordable Care Act, exposing the tax initiative to the same political forces that wrecked their anti-Obamacare push earlier this year.
The House bill, which would be estimated to increase the federal deficit by nearly $1.5 trillion over 10 years, would consolidate individual and family tax brackets to four from seven and reduce the corporate tax rate from 35 percent to 20 percent.
It also would scale back or end some popular tax deductions, including one for state and local income taxes, while preserving a capped deduction for property tax payments.
Democrats have pointed to analyses showing millions of Americans could end up with a tax hike because of the elimination of popular deductions. Repealing or cutting some deductions is a way to offset the revenue lost from tax cuts.
"It's a shameful piece of legislation, and the Republicans should know better," House Democratic leader Nancy Pelosi told lawmakers before the vote.
(Reporting by David Morgan and Amanda Becker; Additional reporting by Susan Heavey, David Alexander and Katanga Johnson; Writing by John Whitesides; Editing by Frances Kerry and Alistair Bell)