US Senate backs GOP budget in step forward for tax revamp
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Republicans on Friday muscled a $4 trillion budget through the Senate in a major step forward for President Donald Trump’s ambitious promise of “massive tax cuts and reform.”
The 51-49 vote sets the stage for debate later this year to dramatically overhaul the US tax code for the first time in three decades, cutting rates for individuals and corporations while eliminating trillions of dollars of deductions and special interest tax breaks.
The tax cuts would add up to USD 1.5 trillion to the deficit over the coming decade, however, as Republicans have shelved fears about the growing budget deficit in favour of a once-in-a-generation opportunity to rewrite tax laws.
“These are reforms that change incentives and drive growth, and we’ve never done that before,” said Senator Pat Toomey, Representative from Pennsylvania.
Then, it is a tough task
Divisions within the GOP indicate the process won’t be easy despite the political imperative.
The upcoming tax measure, always a top item on the GOP agenda, has taken on even greater urgency with the failure of the party to carry out its longstanding promise to dismantle former President Barack Obama’s signature health care law.
Republicans had said failure on taxes would be politically devastating in next year’s midterm elections, when control of the House and Senate are at stake.
When reconciled with the House budget plan, the nonbinding measure would set up special procedures to pass follow-up tax legislation without the threat of a filibuster by Senate Democrats. Pressure is mounting, however, on the House to simply adopt the Senate budget plan rather than risk lengthy negotiations that could delay the tax measure.
The House measure calls for a tax plan that wouldn’t add to the deficit, as well as $200 billion worth of cuts to benefit programs that the Senate has rejected.
Democrats blasted the GOP budget, warning voters that the upcoming tax measure will shower benefits on top-bracket earners, corporations, business partnerships and people inheriting multimillion-dollar estates.
Will it benefit middle class?
Mr. Trump has promised that the tax plan, still under development, is aimed at the middle class, but previous versions have seen upper-income individuals benefiting the most.