THE tax bill initiated by the Republican party completed its journey through America’s Congress on December 20th. The bill is President Donald Trump’s first major legislative accomplishment, and America’s first significant tax reform since 1986. Once Mr Trump signs it into law, America’s tax system will change in numerous ways. Its corporate tax will become “territorial”, like those of most other rich countries. As a result, firms will no longer pay taxes on their overseas profits. At home, the corporate tax rate will fall from 35% to 21% in 2018. Workers will benefit from across-the-board cuts in income taxes until 2025, after which, if Congress takes no further action, most levies for individuals will return to today’s levels or even rise.

The final bill first passed the House of Representatives on December 19th. But Democrats’ parliamentary jockeying forced the House to vote again, after parliamentary problems were found with three of the bill’s provisions. In the final vote, the bill passed the House by 224 votes to 201….Continue reading