2nd LD Writethru: U.S. House passes final Republican tax bill; Senate to vote next

WASHINGTON, Dec. 19 (Xinhua) -- The U.S. House of Representatives on Tuesday passed the final Republican bill to overhaul the tax system in three decades, which would slash income taxes for corporates and individuals while widening American budget deficit and income inequality.

The Republican-controlled House approved the legislation, called the Tax Cuts and Jobs Act, by a vote of 227-203, with all Democrats and 12 Republicans voting against it. Now the bill heads to the Senate, where lawmakers were due to have a final vote Tuesday evening.

While Republicans have a majority of 52 seats in the Senate, they can only afford to lose two votes of senators to pass the tax bill without any support from Democrats.

The House and Senate Republicans had separately passed their own versions of tax bill several week ago, and they came to an agreement on resolving their differences in the tax bill last week.

The final tax legislation would keep the seven individual income tax brackets, while lowering the top individual income rate to 37 percent from the current 39.6 percent.

It would also cut the corporate income tax rate to 21 percent from the current 35 percent and create a 20-percent deduction for income of pass-through businesses such as limited liability companies.

Overhauling the tax code is a top priority for the Trump administration and congressional Republicans before next year's midterm elections. They insist that the broad tax cuts for corporations, small businesses and individuals will boost U.S. economic and job growth.

But Democrats have criticized that the Republican tax legislation would mostly benefit the wealthy and large corporations and increase U.S. budget deficit.

"This Republican bill is not tax reform," House Democratic Leader Nancy Pelosi said Tuesday, claiming Republicans are "exploding the deficit to fill the pockets of the wealthiest and corporate America."

"Americans see this tax scam for exactly what it is - overwhelmingly the polls are showing that the American people reject this - they know it will not help them overwhelmingly," she said.

While the bill would reduce taxes on average for all income groups in both 2018 and 2025, the top one percent of U.S households would receive the largest benefits, according to a new study by the nonpartisan Tax Policy Center published on Monday.

The study also found that the top one percent taxpayers would receive an average tax cut of 0.9 percent of after-tax income in 2027, while low- and middle-income taxpayers would see little change.

While the Trump administration argued that the tax cuts would pay for themselves with faster economic growth, other analyses from independent think tanks and economists have found that the growth effects from tax cuts would be relatively small and U.S. budget deficit would inevitably increase.

The Committee for a Responsible Federal Budget (CRFB) said in a recent analysis that the tax legislation could cost about two trillion to 2.2 trillion U.S. dollars in the next decade, pushing up U.S. public debt to between 98 percent and 100 percent of gross domestic product (GDP) by 2027, compared with 91 percent under current law. Enditem