The House of Representatives is set to vote on a $2 trillion plan Thursday that would overhaul health insurance coverage and increase spending on prescription drugs.
The plan would slash the corporate tax rate from 35% to 20%, cut corporate taxes by $1 trillion and create a tax credit for individuals making $75,000 to $200,000 a year, according to the Congressional Budget Office.
The House plan also would eliminate a provision that would allow the federal government to waive some of the state-based sales tax.
Under the plan, the tax credits would end in 2020, a year when Republicans are set to be in control of both chambers of Congress.
Republicans have vowed to overhaul the tax code and cut taxes, but not without the help of Democrats.
The tax plan has attracted bipartisan support, but Democrats, along with some Republicans, have expressed concerns about its costs and the potential to harm the economy.
Democrats have long criticized Republican plans to cut taxes and cut spending, particularly with the country still recovering from the devastating economic downturn.
The House GOP plan includes provisions that would eliminate the corporate-tax rate, which was cut from 35 to 20% in the House bill and was set to expire in 2027.
Under the House plan, companies that earn more than $1 million a year would no longer have to pay the tax.
They would instead be able to write off the cost of insurance and deduct it from their taxable income.
“The House plan would make it easier for small businesses to save and grow,” Rep. Pete Sessions, R-Texas, a top House Republican, said during a press conference last week.
The legislation would also eliminate the state and local sales tax, which is set at 6.2% and would expire in 2021.
The Senate bill would extend the tax deduction for state and municipal income taxes for four years.
The deduction is set as a credit for households making less than $50,000, $75.00, $100,000 and $250,000.
Under current law, households earning $75K to $150K qualify for the credit.
The new tax credit is projected to generate $2.6 trillion over 10 years, according the Congressional Research Service.
