President Donald Trump signed the Republican tax cut bill into law on Friday, the first big legislative win of his presidency.
“It’s going to be a tremendous thing for the American people. It’s going to be fantastic for the economy. It’s going to keep companies from leaving our shores,” the president said as he signed the bill in the Oval Office. “I consider this very much a bill for the middle class, a bill for jobs.”
Calling it the “biggest tax cut, the biggest reform of all time” — a claim fact checkers say is false — Trump celebrated the $1.5 trillion tax cut and applauded corporations like AT&T that announced employee bonuses because of it.
Polls have shown that the GOP tax plan is not popular with Americans, but Trump told reporters that Americans would begin to see its benefits as soon as their February paychecks. “I don’t think I will have to do much selling,” he said.
Trump was joined by aides, including Chief of Staff John Kelly and National Economic Council Director Gary Cohn, as he signed the measure before departing for his Florida club, Mar-a-Lago, where he will spend the Christmas holiday and remain until the new year with his family. Trump didn’t hold a year-end news conference before leaving, something of a tradition among presidents, and it is unclear whether he plans to do so in Florida.
Trump joked that he decided to sign the tax bill Friday at the White House, rather than hold a more elaborate ceremony next month, because he believed the media would criticize him if he didn’t fulfill his promise to get a tax bill by Christmas.
“I was going to wait for a formal signing sometime in early January, but then I watched the news this morning and they’re all saying, ‘Will he keep his promise, will he sign it by Christmas?'” the president said. “And I called downstairs, I said, ‘Get it ready, we have to sign it now.'”
The law gives the GOP a major legislative achievement to trumpet heading into the midterm elections next year, and the president a much-needed win after a year of failed attempts to repeal and replace Obamacare.
Democrats, however, say the law is a gift to corporations and the wealthy, with little to help average Americans. “Republicans will rue the day that they pass this tax bill because it’s so unfair to the middle class,” Senate Minority Leader Chuck Schumer, D-N.Y., said this week before final congressional approval.
The bill reduces the corporate tax rate to 21 percent from 35 percent and supporters argue that will make U.S. business more competitive overseas. Many pass-through businesses also receive a 20 percent deduction.
It lowers individual tax rates, including trimming the top bracket to 37 percent from 39.6, while doubling the standard deduction and replacing personal exemptions with a $2,000 partly refundable child tax credit. The law eliminates various deductions while limiting others on state and local taxes and mortgage interest.
The measure also exempts larger inheritances from the estate tax, doubling the thresholds to $11 million for individuals and $22 million for married couples.
It has significant implications for health care as well, abolishing the Affordable Care Act’s penalty for Americans who don’t purchase insurance.
“We essentially repealed Obamacare,” Trump told reporters in the Oval Office on Friday. “I think Obamacare is over because of that, and we are going to come up with something that’s really going to be very good.”
The health care law is hardly repealed — nearly 9 million people just signed up for insurance through it for next year — but the Congressional Budget Office estimates the change would lead 13 million more people to go without coverage after a decade and cause premiums on the individual market to rise 10 percent per year.
The Joint Committee on Taxation estimates every income group will receive an average tax cut next year. But the JCT also found that taxes would go up for lower incomes over time, in part because fewer eligible taxpayers would choose to receive health care subsidies through the ACA. By 2027, every income group making less than $75,000 would see a net tax increase.
Despite Trump’s claims, polls show voters are skeptical about the GOP tax plan.
An NBC/Wall Street Journal poll on Tuesday found 24 percent of respondents support the bill, versus 41 percent opposed. And 63 percent say it was designed primarily to benefit corporations and the rich, compared with 22 percent who say it’s aimed at all Americans equally, and just 7 percent who say it’s for the middle class.
Trump also signed a stopgap funding measure on Friday to stave off a government shutdown. The continuing resolution keeps the government open through Jan. 19, and includes $4.7 billion in emergency Department of Defense funding for missile defense and ship repair.
Trump was asked if he wished he’d started the year with an infrastructure plan — a top campaign priority that largely fell to the wayside as he focused on health care and tax reform — and the president said to stay tuned: “Well, we are going to get infrastructure. Infrastructure is the easiest of all.”