Republicans strike deal on tax plan as they rush to pass it before arrival of Alabama's new Democratic senator

Alexandra Wilts
President Donald Trump shakes hands after speaking on tax reform in the Grand Foyer of the White House, Wednesday, Dec. 13, 2017, in Washington. (AP Photo/Evan Vucci)

Senate and House Republicans have struck a tentative deal on a tax plan as they race to get a final measure on President Donald Trump’s desk by Christmas.

At the same time, Democrats are urging Republicans to delay the process until a newly-elected Democratic senator from Alabama, Doug Jones, is seated - currently expected not to be until after the Senate wraps up its work for the year.

In a stunning upset on Tuesday, Mr Jones defeated his Republican opponent Roy Moore in a special election, flipping control of the seat and reducing the Republican Senate margin to 51-49.

Senator Ron Wyden, the top Democrat on the finance committee, wrote on Twitter: “The people of Alabama have spoken. Republicans and the administration must drop their partisan attempts to rush a corporate handout through Congress until Senator-Elect Jones is sworn in.”

On the other side of Pennsylvania Avenue, Mr Trump in a speech at the White House said if Congress sends him a bill to sign before Christmas, the Internal Revenue Service - that nation’s tax-collecting agency - has confirmed that “there will be lower taxes and bigger paychecks starting in February.”

Mr Trump touted his economic record, and predicted the tax bill would pass Congress without any votes from Democrats “for political reasons.”

The speech appeared to be another attempt by Mr Trump to market the Republican tax plan as a big win for middle-class families - even though both the Senate and House versions were more tilted in favour of wealthy individuals and corporations.

“Millions of middle-class families will win under our plan,” Mr Trump said while flanked by members of five families that he said would benefit from the tax bill before Congress.

The House and Senate each passed their own tax legislation over the past month. While both versions started from the same core principles - cutting taxes on businesses while also reducing rates and eliminating some breaks for individuals - they diverged on multiple key points.

Members of both chambers have been meeting over the past week to hash out these differences.

According to the New York Times, the agreement between Senate and House Republicans lowers the corporate tax rate from 35 per cent to 21 per cent - a change which will go into effect in 2018, rather than 2019, as the Senate bill originally called for. Both chambers of Congress had originally aimed to get the rate dropped to 20 per cent.

Among other changes, the final bill would also repeal the Affordable Care Act’s requirement for most individuals to have health insurance. Such a move would lead to 13m less insured people over the next decade, according to the nonpartisan Congressional Budget Office.

The top individual income tax rate will also drop to 37 per cent, a decrease from the current rate of 39.6 per cent.

The House and Senate are expected to vote on the final tax measure next week. But it is still uncertain whether it will pass in both chambers.

The final bill is reported to include provisions that senators expressed concerns about earlier this week.

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