The Senate has voted to repeal a House version and the GOP will use the reconciliation process to pass the legislation, ending an era of bipartisanship on taxes.
The House approved the measure by a vote of 217-217 on Thursday, with Majority Leader Kevin McCarthy (R-Calif.) and Majority Whip Kevin McCarthy(R-CA) joining Democrats to support the measure.
House Budget Committee Chairman Kevin Brady (R, Texas) had sought to use reconciliation to replace the $1 trillion-overseas tax cuts with a lower tax rate for companies and households.
“While this is an important milestone in this process, I am encouraged by the passage of the House-passed version of the Tax Cuts and Jobs Act,” Brady said in a statement.
“As I’ve said, we’re going to need all hands on deck to help pass this bill.
I will continue to be focused on making sure this bill becomes law.”
A bipartisan group of lawmakers led by Sen. Patty Murray (D-Wash.) was the only group to vote against the House bill.
The legislation would have slashed the top corporate tax rate from 35 percent to 21 percent, eliminated the estate tax, lowered the top rate for the wealthiest individuals from 39.6 percent to 25 percent and raised the standard deduction to $12,000.
The Senate’s tax plan also included a $400 million tax credit for those making between $500,000 and $1 million per year.
The measure would also have provided a $10,000 refundable tax credit to individuals making more than $200,000 per year and a $4,000 child tax credit.
The bill was also expected to include a repeal of the alternative minimum tax, which would have raised the rate on some middle-class and low-income earners.
The vote marks the latest blow for Republicans who have struggled to pass a tax overhaul despite President Donald Trump’s vow to get the bill done.
Senate Majority Leader Mitch McConnell (R., Ky.) announced earlier in the week that Republicans were moving ahead with a vote on the legislation in the coming days, though no date has been set for the vote.
Democrats and some Republicans have pushed for more concessions to Democrats on tax reform.
But Republicans have long pushed for an extension of the Bush-era tax cuts that expire at the end of this year, and they were willing to compromise on that in exchange for an increase in the estate and alternative minimum taxes.
Democrats have called the GOP tax bill a giveaway to the wealthy.
It would also make it easier for people to avoid taxes.
Senate Minority Leader Chuck Schumer (D, N.Y.) said in an interview Thursday on NBC’s “Meet the Press” that he is “optimistic” about passage of a tax bill, but said that the GOP must not be allowed to “turn the whole thing around” by using reconciliation to pass it.
“I think the tax reform bill needs to be a good tax reform, and I think it needs to get done,” Schumer said.
“The last thing you want to do is take the whole package and turn it around and have the whole country go crazy.”