House Passes Tax Reform Bill; Fight Now Goes to Senate

John Jordan | November 2017

WASHINGTON—As expected, the U.S. House of Representatives approved the controversial Republican tax reform plan—“Tax Cuts and Jobs Act”—on Thursday by a 227-205 margin.

The battle over tax reform now switches to the U.S. Senate where the GOP holds a razor thin two-seat majority over Democrats, who have all lined up against the House and Senate tax reform bills. Sen. Ron Johnson (R-KS) announced earlier this week his opposition to the current Senate version. Republican leaders in the House and Senate have vowed to get a tax bill to the President’s desk by the end of the year.

House Speaker Paul Ryan after the vote said, “Failure was not an option.”

If the Senate passes its version of the tax reform plan, then the House and Senate would finalize legislation in conference. President Trump has stated he wants to sign a tax reform bill before the end of this year.

The White House released a statement after the vote that President Donald Trump applauded the House of Representatives for passing the Tax Cuts and Jobs Act and termed it “ a big step toward fulfilling our promise to deliver historic tax cuts for the American people by the end of the year. We are working together to allow hardworking, middle-class families to keep more of their money, and to empower our companies and workers to dominate their global competition. A simple, fair, and competitive tax code will be rocket fuel for our economy, and it’s within our reach. Now is the time to deliver.”

New York Gov. Andrew Cuomo released a statement after the House vote slamming the legislation as harmful to New York and other high cost states.

“It’s targeted at New York. It’s targeted at California and about 10 other states that happen to be Democratic states. I’m sure that was a coincidence,” Gov. Cuomo said. “Number two, you have Congresspeople in New York who are voting for it because their political leaders demand that they vote for it. I think that is reprehensible because they’re not loyal to their political leaders. They’re loyal to the people who elected them. This bill is poison for New York.”

Hudson Gateway Association of Realtors Chief Executive Officer Richard Haggerty said in response to the passage of the tax reform bill in the House, “It’s very disappointing that the House of Representatives passed a tax reform bill that is so hostile to homeownership and to the residents of New York State. We must now put our faith in the Senate and convince them that the current tax reform proposals will be harmful to the overall economy and will negatively impact middle class taxpayers.

National Association of Realtors President Elizabeth Mendenhall called the House bill “an all out assault on homeownership.”

“It’s disappointing to see this legislation move forward, but the real work to shape this debate is just getting started,” she said. “Realtors will now look to the Senate as we make our case that the tax reform proposals pending before Congress overwhelmingly remove the tax incentive to purchase and own a home in America.”

She said that the battle is much more than Realtors opposition to a cap on the mortgage interest deduction. Mendenhall said, “it is about whether homeowners will have the rug pulled out from under them with a tax system that suddenly favors renting over owning in a big way.”

She warns that middle class homeowners will see their home values fall. “American homeowners shouldn’t have to pay for corporate tax cuts with their home equity. It’s a matter of basic fairness; 1.3 million Realtors have known since the beginning, and America’s 75 million homeowners are just beginning to learn, that homeowners will be the ones paying the tab,” Mendenhall warned. “Realtors will do our part to spread the word as we work with the Senate to address this impending assault on homeownership.”

 

John Jordan
Editor, Real Estate In-Depth