Washington • Overhauling the U.S. tax code has been one of Sen. Orrin Hatch’s top goals for decades, and now the effort seems on the cusp of becoming law before year’s end, a big win for the powerful Utah Republican who saw the bill through the Senate and earned kudos from President Donald Trump.
Hatch, chairman of the Senate Finance Committee, which oversees tax policy, took a victory lap after the Senate pushed through a measure early Saturday that would lower the corporate rate, restructure tax brackets and jettison some loopholes.
“We are one step closer to delivering MASSIVE tax cuts for working families across America,” Trump tweeted after the senators voted 51-49 largely along party lines to pass the bill.
The president offered “special thanks” to two people: Senate Majority Leader Mitch McConnell, R-Ky., and Hatch “for shepherding our bill through the Senate.”
Sen. Mike Lee, a Utah Republican who had reservations about the measure, had tried to amend the legislation to make the child tax credit for low-income families refundable against the payroll tax liability. But that push went down 29-71 with only 20 Republicans backing the effort.
Still, Lee and his co-sponsor, Sen. Marco Rubio, R-Fla., voted for the overall bill.
“Utah families are the big winners tonight, thanks to the doubling of the child tax credit to $2,000,” Lee said in a statement. “I wish we could have done more for working families by making that credit refundable, but we did lay the groundwork for future pro-family tax reform, and I am confident we will get there someday.”
Sen. Bob Corker of Tennessee was the lone Republican holdout. All Democrats, and the independents who caucus with them, voted against the bill.
Hatch, a senator for nearly 41 years and part of the last successful effort to reform the tax code in 1986, heralded the passage, saying he was thrilled with the bill and will help get it to the president’s desk before Christmas.
“This is a great achievement and something that will literally help millions and millions of young people in our society,” Hatch said after the early morning vote.
He added: “Senate Republicans today came together to make history and advance a comprehensive tax overhaul that will deliver more income, more jobs, higher wages and more opportunity for all Americans.”
While Senate passage was a major step, it’s unclear yet whether the House — which passed its own tax overhaul — will take up the Senate legislation or the two chambers will hold a conference committee to hammer out the differences. Hatch is expected to be part of that committee.
While the House and Senate are close in their bills, there are some key items to hash out:
The Senate version takes away penalties for Americans who don’t buy insurance as mandated by the Affordable Care Act; the House doesn’t.
With tax brackets, the Senate keeps seven rates with a max of 38.5 percent, while the House has four rates and a top of 39.6 percent.
The House version caps the mortgage interest deduction at $500,000, while the Senate keeps it at $1 million.
The Senate keeps the alternative minimum tax — a provision meant to keep wealthy Americans and corporations from using loopholes to escape taxes — on corporations and raises the exemption for individual taxpayers. The House repeals both.
The Senate doubles the estate tax exemption until the tax ends in 2026, while the House jettisons the tax by 2024.
Hatch says he’s unsure if the House will go with the Senate plan or want to negotiate a final bill, but that he imagines a quick effort to vault the legislation through Congress.
“If we end up in conference, I think those negotiations will go smoothly because we aren’t very far apart,” Hatch told reporters early Saturday. “And because of the Senate’s reconciliation rules, the final bill will probably be closer to the bill we passed [early Saturday]. We will have a final bill on the president’s desk before Christmas.”
Democrats decried the measure as a giveaway to Wall Street and the wealthy, and noted that the Senate version would add $1.5 trillion to the nation’s debt over a decade.
The minority party also pointed out that while the bill slashes the corporate tax rate to 20 percent from 35 percent permanently, the individual tax changes expire in 2026 and that deductions for corporations remain that were taken away from individuals.
The bill also eliminates the deduction for Americans to write off their state and local income and sales taxes and caps the property tax deduction at $10,000.
“This tax scam is an absolute betrayal of America’s working families,” Democratic National Committee Chairman Tom Perez said after the vote. “While Senate Republicans allowed virtually no debate or time to even read the hundreds of pages of hastily drafted, handwritten bill text, they did manage to add dozens of new giveaways to special interest lobbyists. Republicans are unilaterally taking billions of dollars away from the middle class and handing it over to their billionaire donors and wealthy corporations while destroying the future of our economy.”