Republican Kevin Brady, who is chair of the ways and means committee, said the act was ‘bold legislation to overhaul America’s tax code for the first time in 31 years. With this bill, a typical middle-income family of four, earning $59,000 (the median household income), will receive a $1,182 tax cut.’

Brady said: ‘Today marks the beginning of the end of our nation’s broken tax code. The Tax Cuts and Jobs Act will deliver real tax relief to Americans across the country – especially low- and middle-income Americans who have been struggling for far too long to earn a raise and get ahead.

‘Our legislation is focused entirely on growing our economy, bringing jobs back to our local communities, increasing paychecks for our workers, and making sure Americans are able to keep more of the money they earn.’

The 429-page bill lowers the US corporate tax rate to 20%, down from 35%, the largest reduction the US has ever made. Corporate tax will become ‘territorial’ so foreign income by US companies will be tax-free.

All untaxed income currently held overseas will immediately be taxed at a fixed rate: 12% for money held in liquid assets like stocks and bonds, 5% for intangibles like buildings and factories.

There will also be a 10% ‘minimum tax’ imposed on profits above a certain threshold from foreign subsidiaries of US companies in the future, to prevent companies from moving income abroad to avoid taxes.

Additionally, any money that multinational corporations move from the US abroad will be subject to a new 20% tax.

The bill also reduces maximum tax rate on small businesses and other non-corporate enterprises to 25%, down from the present maximum rate on ‘pass-through’ income of 39.6%, and also allows businesses to immediately write off the full cost of new equipment.

Brady said: ‘By delivering tax relief to businesses of all sizes, the Tax Cuts and Jobs Act makes it easier for entrepreneurs to achieve the American Dream – to start a business and create jobs in our local communities, and it entices employers to bring their headquarters and jobs back home.’

The legislation proposes three rates of tax for individuals at 2%, 25% and 35%, and significantly increases the standard deduction to protect roughly double the amount of earnings each year from taxes – from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.

It eliminates special-interest deductions that increase rates and complicate taxes, with Brady claiming an individual or family can file their taxes on a form as simple as a postcard. The bill introduces a new family credit to help with the cost of raising children, and keeps the earned income tax credit for low earners and overhauls death duties.

Trump has signalled his backing for the bill, telling a press conference that it will be delivered by the end of the year and describing it as ‘one of the great Christmas presents.’

However, the bill’s passage through Congress is likely to prove difficult, as it does not have the backing of the Democrats, and some Republicans are concerned about caps on mortgage reliefs and reliefs from state taxes, among other provisions.

The Tax Cuts and Jobs Act is here.

Report by Pat Sweet