The legislation as written would dramatically cut the corporate tax rate, make a number of other sweeping changes to the business tax code, cut tax rates for many individuals, and eliminate a number of deductions for individuals. Republicans argue the legislation will jump-start the economy and benefit the middle class.
Democrats have attacked the bill as a giveaway to corporations and the wealthiest Americans, and pointed out that many Americans could see higher taxes in the long run under both the House and Senate plans. An analysis by the Joint Committee on Taxation concluded that, by 2025, many middle-class families—24.7 percent of households earning between $40,000 and $50,000, and 27 percent of households earning between $50,000 and $75,000—would face higher tax bills under the House bill. Economist Ernie Tedeschi projected that 45 to 55 percent of families with children under the age of 18 would see higher taxes by 2027.
All eyes will now turn to the Senate, which is considering tax reform legislation that differs considerably from the House's bill. Yesterday, Republican Senator Ron Johnson (R-Wisconsin) said he opposed both the House and Senate's tax reform legislation, potentially jeopardizing that chamber's passage of tax reform legislation. If the Senate does pass a bill, differences between the two bills would have to be resolved in conference.