- The House passed its version of the Republican Tax Cuts and Jobs Act on Thursday.
- The bill passed despite objections from some Republican members.
- Passage of the bill is another step toward the Republican overhaul of the tax code, but there is still work to be done.
House Republicans took a huge step forward on their plan to overhaul the federal tax code Thursday with the passage of the Tax Cuts and Jobs Act.
The bill passed mostly along party lines, 227 to 205, with two Democrats not voting and 13 Republicans voting against it. The White House released a statement after the vote praising the result.
“President Donald J. Trump applauds the House of Representatives for passing the Tax Cuts and Jobs Act – a big step toward fulfilling our promise to deliver historic tax cuts for the American people by the end of the year,” the statement said.
Before the vote, House Speaker Paul Ryan and Republican leadership faced questions about whether they could garner enough votes from party members in states where people were expected to lose a key deduction under the plan. Republican votes against the bill came almost exclusively from members in those states: New York, California, and New Jersey.
Residents of these states are heavy users of the state and local tax deduction, which allows people to subtract state and local taxes from their federal tax bill.
The first version of the bill eliminated the deduction, but leaders were able to come up with a compromise. In the version passed by the House, the SALT deduction would be repealed for income and sales taxes, but most people would still be able to deduct up to $10,000 in property taxes.
For many members in states with high taxes, the compromise was not enough. Rep. Dan Donovan of New York, a Republican who voted “no” on the bill, said he would support the final bill “if the SALT deduction gets put back in.”
Donovan also said that discussions between skeptical members and leadership on the SALT deduction were ongoing and that the provision could change when the bill comes back to the House after any revisions in the Senate.
“I think that what we’re going to vote on today is not going to be the final bill that’s going to go to the president’s desk,” Donovan told Business Insider before the vote. “I think that there’s still going to be negotiations. I think there might be people today voting ‘yes’ that would like to see the SALT deduction retained and hoping that’s done when they go to conference with the Senate.”
Other members from the high-tax states still decided to support the bill given the compromise and the bill’s broader proposals. Republican Rep. Tom MacArthur of New Jersey, who was initially skeptical of the bill, said proposed changes to things like the standard deduction were enough to win him over despite the significant changes to the SALT deduction.
“This is not only good for the families and businesses in my state, but it’s also good for the country, and I think it is important to support it for that reason,” MacArthur told Business Insider on Thursday.
The massive bill is moving through Congress at breakneck speed, but the House bill’s passage is just another in a series of steps for it.
The House bill was first introduced just two weeks ago, and it cleared the House Ways and Means Committee last week. The Senate is marking up its version of the bill in the Finance Committee, and there already appear to be issues in that chamber.
If the Senate is able to pass its version of the bill, House and Senate members will have to come together on a conference committee to agree on a compromise bill. That bill would then need to be approved by both chambers before heading to Trump’s desk.