US Congress passes historic tax reform bill

Donald Trump promises his tax cuts will “pour rocket fuel” into the US economy as the House passed the historic reform bill.

Donald Trump has hailed the passing of the historic tax reform bill. Picture: Getty images.

Donald Trump has promised his tax cuts will “pour rocket fuel” into the US economy as the House passed the historic reform bill early today, delivering the president his first major legislative victory.

“I promised the American people a big, beautiful tax cut for Christmas (and) with final passage of this legislation, that is exactly what they are getting,” a jubilant Mr Trump said.

“By cutting taxes and reforming the broken system, we are now pouring rocket fuel into the engine of our economy. America is back to winning again, and we’re growing like never before. There is a great spirit of optimism sweeping across our land. Americans can once again rest assured that our brightest days are still to come.”

Mr Trump will sign the new bill — the first major US tax reform since the Reagan era — within days after the House early today passed a final procedural vote to finalise the $US1.5 trillion tax cut bill.

Celebrating the passing of the bill with Republican leaders at the White House, Mr Trump declared: “We are making America great again.”

“We broke every record,” the president said, thanking congressional leaders for driving through what he called “the largest tax cut in the history of our country.”

House Speaker Paul Ryan, in turn, credited Trump’s “exquisite presidential leadership” for the success of the contentious plan, assailed by Democrats as a giveaway to the wealthiest that risks blowing a hole in the national debt.

The measure slashes the corporate tax rate from 35 per cent to 21 per cent as well as providing tax cuts to the middle class and reducing to top tax rate from 39.6 to 37 per cent.

The measures will cost $US1.5 trillion, an amount with Mr Trump and Republicans say will be recouped by higher revenues from the economic growth which will be spurred across the country by the cuts.

“The bill means more take-home pay,” Mr Trump said. “And really, above all else, it’s a jobs bill.’

Democrats attacked the bill which they claim will benefit only corporations and the rich.

“It’s a disaster for the American people,” said Senator Bernie Sanders.

Senate Minority Leader Chuck Schumer said “We believe you’re messing up America.”

Early today Mr Trump tweeted that he was not getting the credit he deserved for helping to push through such a major reform.

The Tax Cuts are so large and so meaningful, and yet the Fake News is working overtime to follow the lead of their friends, the defeated Dems, and only demean. This is truly a case where the results will speak for themselves, starting very soon. Jobs, Jobs, Jobs!

— Donald J. Trump (@realDonaldTrump) December 20, 2017

“The Tax Cuts are so large and so meaningful, and yet the Fake News is working overtime to follow the lead of their friends, the defeated Dems, and only demean,” the president wrote on Twitter. “This is truly a case where the results will speak for themselves, starting very soon. Jobs, Jobs, Jobs!”

The tax bill is unpopular with most Americans, with polls showing 55 per cent do not approve compared with only 33 per cent who do.

But Republicans believe the criticism will melt away when the tax cuts start flowing from February.

“If we can’t sell this to the American people, we ought to go into another line of work,” Senate majority leader Republican Mitch McConnell said.

Australian Business Council chief Jennifer Westacott said the move needed to be matched locally, where the company tax rate was “frozen in time”.

“US moves, along with other nations’ commitments, will leave Australia with the second-highest company tax rate in the OECD,” Ms Westacott said.

“The battle for global investment dollars is fierce, and we are losing out.

“This is not a tax cut for millionaires, this is a tax cut that will benefit the millions of workers employed by Australian companies.

“Australia’s 30 per cent rate was set 16 years ago but is now woefully uncompetitive against the United States at 21 per cent, the United Kingdom’s move towards 17 per cent and France aiming for 25 per cent. The average in Asia is 21 per cent.

“The United States, France, Belgium and the United Kingdom are acting to protect their workers and boost their economic growth by ensuring they remain competitive – Australia must do the same.”

Cameron Stewart is also US Contributor for Sky News Australia