With Republicans in control of both houses of Congress, the party is poised to begin a major push to revamp the tax code next year, a major change that would reshape the U.S. economy and possibly alter the political landscape of decades.
The Senate’s version of the tax bill, called the Better Care Reconciliation Act, would lower tax rates for everyone by nearly $1,000 a year for families, as well as the wealthy and individuals making more than $1 million per year.
It also would cut taxes on corporations and the wealthy by an average of about $700, according to the Congressional Budget Office.
But the House version would also slash taxes on individual earners by about $1.5 trillion, the CBO said.
The GOP tax plan also would significantly raise the minimum wage, which is currently set at $7.25 per hour, and give states more flexibility to set their own minimum wage.
The bill also would boost the child tax credit and give the Earned Income Tax Credit to families earning less than $100,000, according the CBO.
The legislation would also give parents who file jointly a refundable $2,000 tax credit on their tax bill.
The House and Senate bills have been stalled in Congress for months, after lawmakers were unable to reach a deal on a repeal-and-replace plan that would repeal and replace Obamacare, or the Affordable Care Act, and also pass a tax reform bill.
Republicans were able to pass a $1 trillion tax reform plan with Democratic support in the House and a $2 trillion tax plan with President Donald Trump’s support in a deal between the two chambers in early June.
But the House passed its version of a tax overhaul bill on Aug. 1 and it has not been signed by Trump, who has said he wants to see a tax bill before his term ends.
A bill from the House would repeal the Affordable Health Care Act’s taxes and cut spending for several key programs, including Medicaid and Medicare, the largest chunk of the federal government’s budget.
It would also repeal the popular child tax Credit, a refundability tax credit for parents who make less than half the federal poverty level and also lower the tax rate on dividends.
The House bill would also allow states to set higher taxes on businesses, including the wealthiest ones.
But Democrats say Republicans have failed to pass any major legislative change since Trump took office.
The Democrats are also demanding a refund for the child credit, which they say is one of the most regressive in the nation.
The Democrats have also demanded that the Senate pass a repeal of the Affordable Medicaid expansion, which expanded health insurance coverage to millions of low-income people and helped them pay for college, medical care and other necessities.
The Republican-led House of Representatives passed its tax bill in May, but the Senate has yet to take up the measure.
Republicans say they intend to take a bill to Trump and Congress this week, but Democrats have said they may have to wait until the August recess.