Trump’s tax cuts move a step closer

27 Oct 17

The US House of Representatives has passed a proposed budget, which paves the way for Donald Trump’s tax cuts. 

The senate passed the budget blueprint last week for the Republican tax cuts, which it is believed will add up to $1.5trn to the federal deficit over the next decade. 

The vote in the House of Representatives was 216 to 212, with 20 Republicans joining Democrats in opposing the budget. 

Although the tax reforms are still being written and subject to another vote in the Senate, the US president is expected to make an announcement confirming them next week. 

Reconciliation rules dictate the Senate now only has to pass the tax cuts in the budget with a simple majority, rather than the usual 60 vote majority. 

The Republican tax framework, which Trump has called the “largest tax cut in [the] country’s history”, includes a larger zero tax bracket, lower tax rates for individuals, lower small-business tax rates and lower corporate tax rates. 

US agriculture lobbyists have warned that some farmers and ranchers could end up paying higher taxes after the reforms.

They are trying to ensure the sector does not lose tax breaks that are currently keeping the sector profitable.

The tax plan would result in a cut in the corporate tax rate from 35% to 20%.

Patricia Wolff, senior director for congressional relations at the American Farm Bureau Federation told the Financial Times that many farmers pay an effective tax rate below 20% and they will end up paying higher taxes as a range of tax deductions could be scrapped.

The US president also said he would “repeal and replace” Obamacare and cut subsidies to health insurance companies for low-income citizens.

Did you enjoy this article?

Related articles

Have your say

Newsletter

CIPFA latest

Most popular

Related jobs

Most commented

Events & webinars