The US House of Representatives passed the final version of the GOP tax reform bill Tuesday.
The bill passed the house by a vote of 227-203, largely along party lines. Only twelve Republicans opposed the bill.
Republican Congressman John Moolenaar supported the bill. He said by lowering taxes for corporations, the bill will create more jobs and increase wages.
“I believe that when people see the benefit to the economy of this policy that people are going to want to extend it further. It’s something that will benefit the economy, we’re hoping to see growth go from 2% to 3% and that will have tremendous dividends across the board.”
A 2012 study from the Congressional Research Service, a research arm of Congress, found no correlation between top tax rates and economic growth. That study was briefly retracted after Republicans said it failed to factor in the long-term benefits of cuts.
Congressman Moolenaar said by lowering the corporate tax rate from 35 percent to 21 percent, the bill will incentivize job growth.
“We have penalized job providers from bringing dollars that are offshore back to America. By lowering the corporate tax we are able to encourage and incentivize investment here. That’ll lead to more jobs and better paychecks.”
Some economists say the tax cut simply isn’t low enough to incentivize corporations to move their money back from offshore accounts where they pay almost no taxes.
Research from the Tax Policy Center, a nonpartisan think tank, found that the greatest beneficiaries of the bill would be households with more than one million dollars in annual income.
Congressman Moolenaar said the plan benefits middle-class Americans.
“Student loan interest will continue to be deductible and also graduate students and those who have tuition waivers will not be taxed in this version of the bill. We think that’s a true benefit for students at Central Michigan University and across the state.”
Research from the Tax Policy Center also shows taxes will increase in ten years for households making less than 75 thousand dollars because many middle-class cuts are set to expire in 2025.
Congressman Moolenaar said he thinks the cuts will be renewed once American’s see growth in jobs and wages.
The bill is expected to cost roughly one point five trillion dollars, money Moolenaar said the economy will be able to recoup in growth.
The Senate was expected to vote on the final bill late Tuesday night