On a largely party line vote, the U.S. House of Representatives approved a nearly $1.5 trillion overhaul of business and personal taxes Thursday.

  • House passed tax overhaul on largely party lines
  • Consolidates income tax brackets to 4, reduces corporate taxes
  • Faces an uncertain future in the Senate

The House voted 227-205 to approve the bill, which would bring the biggest revamp of the U.S. tax system in three decades.

Most of the House bill's reductions would go to business. Both the Senate and House would slash the 35 percent corporate tax rate to 20 percent and reduce levies on millions of partnerships and certain corporations, including many small businesses.

Personal income tax rates for many would be reduced through some deductions, and credits would be reduced or eliminated. But projected federal deficits would grow by $1.5 trillion over the coming decade. 

Those individual tax rates would only last until 2023, after that some Americans could see their taxes go up, especially if the Family Flexibility Credit goes away. 

The measure puts GOP leaders closer to delivering to President Donald Trump a crucial legislative achievement after nearly a year of failures. 

Adding to the trouble, a growing number of tax analyses showing the plan would give tax cuts to millionaires while negatively impacting lower income households.

The latest report comes from the non-partisan Joint Committee on Taxation.

What's in the bill

Here's what this tax overhaul does:

INDIVIDUAL INCOME TAX:

  • Consolidates the tax rate to four brackets
    • 12 percent: Up to $45,000 of taxable income for individuals; $90,000 for married couples filing jointly
    • 25 percent: Over $45,000 to $200,000 for individuals; Over $90,000 to $260,000 for married couples
    • 35 percent: Over $200,000 to $500,000 for individuals; Over $260,000 to $1 million for married couples
    • 39.6 percent: Over $500,000 for individuals; Over $1 million for married couples
  • Doubles the standard deduction to $12,200 for individuals, $24,400 for married couples
  • Eliminates personal exemptions
  • Increases child tax credit to $1,600. Would not be available to the lowest-income families if they don't owe any federal income taxes. Would only last 5 years
  • New $300 family tax credit. Allows taxpayers a credit if they are supporting any nonchild dependents
  • Kills state and local income tax deduction, along with sales tax deductions
  • Limits the property tax break for up to $10,000
  • Limits deductible mortgage interest for up to $500,000
  • Repeals deductions for:
    • Medical expenses
    • Tax preparation fees
    • Alimony payments
    • Student loan interest
    • Moving expenses
    • Plug-in vehicles
    • Deductions for theft or loss of valuables
  • Graduate students who get tuition waivers to teach or do research would have to pay income tax on the waiver
  • Repeals the estate tax
  • Repeals the Alternative Minimum Tax

CORPORATE TAXES:

  • Lowers corporate tax rate permanently to 20 percent.
  • Makes it so American companies only owe U.S. taxes on money they make in the U.S. Called a territorial tax system.
  • HOWEVER, companies would have to pay a one-time rate of 14 percent on existing foreign profits if held offshore in cash. 
  • Lowers tax rate on pass-throughs.

Information from the Associated Press, CNN was used in this report.

But the bill faces an uncertain future in the Senate, where some Republicans have already voiced concerns about provisions in that version of the bill.