Trump’s contentious US tax bill hits a snag after passing in House of Representatives

US POLITICIANS will have to vote again on Trump’s tax bill even after it passed in the House of Representatives - because it was found to violate Senate rules.

THE Republican-controlled US House of Representatives passed a landmark tax overhaul, only to have hit a snag after three provisions in the bill were found to violate Senate rules.

Republicans received no Democratic support as they passed the contentious US$1.5-trillion package of tax cuts for businesses and individuals that critics say will particularly benefit the wealthy. However, the House will have to revote after the offending provisions are removed.

The United States is one step closer to a major tax overhaul after the House of Representatives passed Trump’s tax bill. Picture: Chip Somodevilla/Getty Images/AFP

The rushed bill, which is the most comprehensive revamp of the nation’s tax code in three decades, was expected to head to the Senate for a decisive vote on Tuesday night, but that will now be delayed.

The news comes after 12 House Republicans joined all Democrats in opposition. Speaker Paul Ryan emphatically declared the bill passed by 227 votes to 203, drawing loud cheers and applause from Republicans in the chamber.

“Today we are giving the people of this country their money back,” Ryan told his colleagues, framing the effort as a once-in-a-generation opportunity for change.

“This is their money after all!”

After the dramatic failure to repeal the health care law of his predecessor Barack Obama, Trump has pushed hard to get the tax cuts across the finish line.

While Trump has billed the tax package as a “Christmas gift” for the country, one Democrat, the liberal congresswoman Barbara Lee, branded the measure “a slap in the face to low and middle-income families.”

The bill shifts to the Senate, where the margin of support appears to be tighter. Majority Leader Mitch McConnell said a final vote would likely occur during Tuesday night’s session.

“Congress is standing at the doorstep of a historic opportunity,” said the veteran Senate Republican.

President Donald Trump has fought hard to get the tax reforms across the line. Picture: Mark Wilson/Getty Images/AFP

Trump’s success comes as Prime Minister Malcolm Turnbull and Treasurer Scott Morrison are attempting to cut Australia’s corporate tax rate from 30 per cent to 25 per cent in what they say is a bid to make the country a more attractive investment prospect for employers.

The government faces fierce opposition from Labor which claims the federal budget cannot afford the tax cuts at the moment and that it is special treatment for the “top end of town” over average Australians who have been suffering long-term low wage growth.

Mr Morrison has argued job opportunities and wage growth prospects for the majority of workers will only get worse if Australia does not cut the corporate tax rate as companies take their business to other countries.

MORE: Midyear budget update 2017: Scott Morrison grilled over wage growth

Should the Tax Cuts and Jobs Act make it into law it would be the Republicans’ first major legislative victory in the 11 months since Trump’s inauguration.

The Republican plan is projected to add nearly US$1.5 trillion (A$1.96 trillion) to the national debt over the coming decade, according to the Joint Committee on Taxation.

But that figure drops to about US$1 trillion (A$1.3 trillion) when economic growth is accounted for.

Ryan predicted the bill will give a needed jolt to the economy and to struggling American families.

Congratulations to Paul Ryan, Kevin McCarthy, Kevin Brady, Steve Scalise, Cathy McMorris Rodgers and all great House Republicans who voted in favor of cutting your taxes!

— Donald J. Trump (@realDonaldTrump) December 19, 2017

He stressed that a median-income family of four earning US$73,000 (A$95,250) annually would save US$2,059 (A$2,687) in taxes next year.

The Democratic opposition has denounced the measure as mostly benefiting companies and the wealthiest Americans — including Trump himself.

They also warn the reform risks blowing a hole in the national debt, which has surged past US$20 trillion (A$26.1 trillion).

“Here we are, watching the fiscal hawks of the Republican Party blow through every red light on their way off the cliff,” declared House Democrat Terri Sewell.

Republican leaders unveiled their final version of the bill only late last week, after a period of negotiations between the House and Senate to iron out differences.

Trump has demanded the bill be on his desk by Christmas.

Speaker of the House Paul Ryan takes questions from reporters after the House passed tax reform legislation on Capitol Hill December 19, 2017 in Washington, DC. Picture: AFP/Brendan Smialowski

His party holds a 52-48 majority in the Senate, and can afford only two defectors.

With Senator John McCain, who has brain cancer, announcing he is undergoing treatment and will not return to Washington until January, that number shrinks to just one, although no Republicans are publicly opposed to the measure.

Vice President Mike Pence, who is president of the Senate, would be called on to cast the deciding vote in case of a deadlock.

Under the legislation, the federal corporate tax rate would fall from 35 per cent to 21 per cent — a notch up from the 20 per cent in previous versions — and the maximum individual income tax rate, for the nation’s wealthiest, would drop from 39.6 per cent to 37 per cent.

The bill also doubles the standard deduction for families, and doubles the child tax credit, provisions Republicans say will help middle class families.

But it also provides a clear boon for the wealthy, including a doubling of the amount of money that can be exempted from inheritance tax.

Top House Democrats Nancy Pelosi called the bill a “moral obscenity.” “This GOP tax scam is simply theft — monumental brazen theft — from the American middle class,” she said.

While Republicans failed earlier this year to repeal and replace Obamacare, the tax plan takes a key step in that regard, by scrapping the individual mandate that requires nearly all Americans to have health insurance or pay a fine.

Because the government subsidises some health plans under Obamacare, repealing the mandate is projected to free up US$338 billion (A$441 billion) over 10 years to help pay for the overhaul, but Democrats and several experts warn it would also lead to 13 million fewer people with health insurance over the next decade.