What's in the tax reform bill just passed by the House?

Also, find out how your Minnesota representative voted on it.
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The U.S. House on Thursday voted in favor of a Republican-backed tax bill that has ramifications for every American.

The bill passed the House by a vote of 227-205, and contains $1.5 trillion worth of tax cuts for businesses and individuals, the New York Times reports.

Thirteen Republicans joined every Democrat in voting against the bill, with those in opposition criticizing it for featuring tax cuts that mostly benefit the nation's wealthiest. Supporters of the plan say it simplifies the tax code and provides much-needed tax relief for businesses.

The Washington Post reports most Americans (92 percent) would pay the same or lower taxes until 2023, but after then a key tax break – the family flexibility credit – would expire, leading to a number of middle-class families suddenly jumping into higher tax brackets.

The newspaper notes that after 2023, only 40 percent of Americans would pay less tax than before, 22 percent would pay more and the rest would see little change.

The real test for tax reforms comes in the Senate, where a similar (but slightly different) tax bill is currently being discussed. Wisconsin GOP Sen. Ron Johnson said on Thursday that as it stands, he opposes it, as it favors big businesses over small ones, CNN reports.

If the Senate passes different tax reforms, lawmakers from both chambers of Congress will have to work on a compromise bill that both the House and Senate must vote to pass before it lands on President Donald Trump's desk.

How did Minnesota lawmakers vote?

Apart from 13 Republicans who voted against it, the votes followed party lines.

That means Democratic Reps. Keith Ellison, Rick Nolan, Collin Peterson, Betty McCollum and Tim Walz voted against the bill.

Meanwhile Minnesota Republican Reps. Erik Paulsen, Tom Emmer and Jason Lewis voted in favor.

What does the House bill contain?

Here are some of the key points of the tax bill.

Corporation tax cut: Reducing corporation taxfrom 35 percent to 20 percent would be the biggest cut in the business tax's history.

Cuts for smaller businesses: The top individual income tax rate for small business owners will reduce from 39.6 percent to 25 percent. Also, business owners making $150,000 or less would only get taxed 9 percent on their first $75,000 of earnings.

Just four tax brackets: The current seven tax brackets will be reduced to just four: 12, 25, 35 and 39.6 percent.

Doubled standard deduction: The "standard deduction" you apply when doing your tax return will double, meaning the first $12,000 of earnings for individuals and $24,000 for couples is tax-free.

But ... many other deductions disappear: The final House bill is keeping only three itemized deductions, allowing people to deduct charitable donations, up to $10,000 in property/city taxes, and the mortgage interest deduction.

For the 30 percent of people who itemize their deductions, they would no longer be able to deduct things such as the costs of children and student loans from their tax bill. The limit of $10,000 on property tax deductions is expected to hit high-tax states such as Minnesota the hardest.

No estate tax: The repeal of inheritance tax is scheduled for 2024, but before then it's only payable on estates worth more than $11 million, doubling the current $5.5 million threshold.

No change to the individual mandate: Unlike the Senate bill, the House tax bill keeps the Obamacare stipulation that Americans must have health insurance or face a fine.

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