House Republicans on Thursday unveiled their long-awaited tax legislation, promising that the average family would save nearly $1,200 a year.
The bill collapses the existing tax brackets from seven to four, which would pay 12 percent, 25 percent, 35 percent and 39.6 percent. That top rate is unchanged and will apply to income greater than $500,000 for individuals and $1 million for families.
The plan also reduces or eliminates a number of deductions, but would double the standard deduction that individuals and families take.
The bottom line, House Speaker Paul Ryan (R-Wis.) told reporters, is that a family of four earning $59,000 a year would get a cut of $1,182 under the Tax Cuts and Jobs Act.
“This plan is for the middle-class families in this country who deserve a break,” he said, surrounded by some of those families. “It is for the families who are out there living paycheck to paycheck, who just keep getting squeezed.”
President Donald Trump, speaking at the White House, said the tax bill will be a Christmas present to the American people.
“We are giving them a big, beautiful present in the form of a tremendous cut,” he said. “It will be the biggest cut in the history of our country. It will also be tax reform, and it will create jobs.”
House Ways and Means Committee Chairman Kevin Brady (R-Texas), the chief architect of the plan, said the bill would put more money in people’s pockets and spark economic growth.
“Real relief from today’s costly and complex tax code is on the way. With this bill, there’s relief for real American families,” he said. “There’s relief for American workers. And there’s tax relief for our hard-working job creators of all sizes.”
House Majority Leader Kevin McCarthy (R-Calif.) noted that Thursday is the seven-year anniversary of the election that gave Republicans the majority in the House.
“And now we have a president who has pushed to make sure hard-working Americans get to keep more of what they earn,” he told reporters.
The bill would mean taxpayers send $1.5 trillion less to the IRS over a decade, and critics contend that it would cause the national debt to explode.
“Not only would today’s legislation cost more than $1.5 trillion over a decade, but it includes a number of gimmicks, including allowing certain provisions to expire, that could ultimately result in more than $1.5 trillion of new deficits,” Committee for a Responsible Federal Budget President Maya MacGuineas said in a statement. “The bill also continues to rely on unrealistic economic growth assumptions to justify its cost.”
Sen. Rand Paul (R-Ky.) said on “The Laura Ingraham Show” that keeping the top rate unchanged — a move designed to blunt accusations that it is a giveaway to the rich — amounts to “class warfare” and hurts prospects for economic growth.
“It you don’t cut the top 1 percent, you don’t really have a significant tax cut,” he said.
After congressional Republicans failed to repeal Obamacare, pressure has been enormous to deliver on tax cuts. Republican leaders have set a goal of passing the bill through both houses by Thanksgiving and sending it to Trump for his signature.
“We are committed to getting this bill across the finish line this year,” FreedomWorks CEO Adam Brandon said in a statement. “Failure is not an option for us and our grassroots community. We need to boost the economy and get our country back to annual growth above 3 percent.”
Ryan assured reporters that his caucus is united.
“The political will is strong and you can see it right here,” he said.
LizeZette reporter Kathryn Blackhurst contributed to this report.