House Passes Sweeping Tax Reform Bill
November 17, 2017
Senate passes defense bill and sends to Trump’s desk for signature; U.S. Housing Starts Increase More Than Expected in October.
- House passes sweeping tax reform bill. The House passed the most sweeping tax overhaul in three decades on Thursday, with 227 Republican votes in a bill that would enact $1.5 trillion in tax cuts for businesses and individuals, reduce the corporate tax rate to its lowest point since 1939, and cut individual taxes for most households in 2018. The House bill would decrease the corporate tax rate to 20 percent from 35 percent, consolidating seven tax brackets to four brackets, switch the United States to an international tax system in line with the rest of the world, and eliminates or scales back many tax deductions, including for state and local taxes. It also nearly doubles the standard deduction most taxpayers claim on tax returns and increases the child tax credit to $1,600 per child from $1,000. The bill does not lower the top marginal tax rate for the wealthiest. The Senate Finance Committee also voted 14 to 12 along party lines to approve their version of tax reform late on Thursday night, clearing the way for the full Senate to consider the bill after Thanksgiving. To pass the reform in the Senate, Senate Republican leaders can afford only two Republican defections through the narrowly divided chamber and bridge the differences between the bills from the House and Senate. [NYTimes, WSJ]
- Senate passes defense bill and sends to Trump’s desk for signature. The Senate on Wednesday passed by voice vote the National Defense Authorization Act (NDAA), fiscal 2018’s nearly $700 billion defense policy bill, after Tuesday’s 356-70 House approval. The bill would authorize $626.4 billion for the base defense budget and $65.7 billion for a war fund known as Overseas Contingency Operations. The funding would contribute to a 2.4 percent pay raise for service members, increase the number of active duty and reserve troops across the services by 20,000, increase the amount of missile defense, and increase operations in Afghanistan and more ships, planes and other equipment. The bill is moving forward, even without agreement in Congress to raise budget caps, which NDAA funding levels exceeded. [The Hill]
Economic Indicators & News
- U.S. Housing Starts Increase More Than Expected in October. U.S. housing starts rose by 13.7% in October from the previous month to a seasonally adjusted annual rate of 1.290 million, the highest level in a year, signaling that home builders are getting back on track after hurricane activity weighed on residential construction in September. Meanwhile, residential building permits, which can signal the construction in the pipeline, increased 5.9% to an annual pace of 1.297 million last month. The amount of new residential construction exceeded economist expectations. Economists, according to Nasdaq, had expected housing starts to climb to an annual 1.185 million from the 1.127 million originally reported for the previous month. [WSJ, Nasdaq]