The House of Representatives has passed its tax reform bill in the first step toward tax cuts for businesses and Americans.
"Passing this bill is the single biggest thing we can do to grow the economy, to restore opportunity and help those middle income families who are struggling," said House Speaker Paul Ryan, R-Wis.
"For too long our complex tax code has confused American individuals and families, nickel-and-dimed small businesses and obstructed job creation and economic growth," U.S. Rep. Randy Hultgren, R-Illinois, said. "This bill provides tax cuts for the middle class, low-income Americans and U.S. businesses of all sizes."
Next step in the process: the Senate must pass its bill. But that bill has quite a few differences from the House version.
That's when the rubber meets the road as House and Senate negotiators have to agree on a final version that both houses can pass.
And the Senate attempt is up in the air. Republicans only hold a 52-48 majority and one GOP senator already says he's not willing to support the current bill. More about that here.
The House measure would collapse today's seven personal income-tax rates into four: 12, 25, 35 and 39.6 percent. The Senate would have seven rates: 10, 12, 23, 24, 32, 35 and 38.5 percent.
Both bills would nearly double the standard deduction to around $12,000 for individuals and about $24,000 for married couples and dramatically boost the current $1,000 per-child tax credit.
Liberal Oregon Sen. Ron Wyden, top Democrat on the Finance panel, said new projections showed the tax bill was "just shameful" because middle-class families would "get hammered."
And House Minority Leader Nancy Pelosi, D-Calif. said the bill would be "pillaging the middle class to pad the pockets of the wealthiest."
Rep. Hultgren released a GOP response with some bullet points about what he believes the House bill will do:
- Continues the deduction for charitable contributions so people can continue to donate to their local church, charity or community organization.
- Preserving the Adoption Tax Credit so parents can continue to receive additional tax relief as they open their hearts and their homes to an adopted child.
- Preserving the Child and Dependent Care Tax Credit to help families care for their children and older dependents such as a disabled grandparent who may need additional support.
- Maintains the Earned Income Tax Credit to provide important tax relief for low-income Americans working to build better lives for themselves.
- Streamlines higher education benefits to help families save for and better afford college tuition and other education expenses.
- Preserves the home mortgage interest deduction for existing mortgages and maintains it for newly purchased homes up to $500,000.
- Continues to allow people to write off the cost of state and local property taxes up to $10,000.
- Retains popular retirement savings options such as 401(k)s and Individual Retirement Accounts so Americans can continue to save for their future.