(Bloomberg) -- House Republicans passed their version of legislation to overhaul the U.S. tax code by slashing the corporate tax rate, lowering tax burdens for most individuals and adding an estimated $1.4 trillion to the federal deficit over the next decade.

The vote Thursday represents a key milestone in President Donald Trump’s quest to cut taxes for businesses and individuals -- though challenges remain for the GOP’s far-reaching tax plans to fundamentally reshape aspects of the U.S. economy.

The Senate is debating its own separate plan, and it isn’t yet clear the chamber will have enough votes to pass it.

The Tax Cuts and Jobs Act H.R. 1, passed the House in a 227-205 vote. Thirteen Republicans voted against it; all but one of them represent high-tax states that have the most to lose from provisions that would eliminate individual deductions for state and local income taxes.

“We are in a generation defining moment for our country,” House Speaker Paul Ryan said from the House floor before the vote. “What we’re doing here is not just determining the kind of tax code we’re going to have -- what we are doing here is determining the kind of country we’re going to have.”

“Under this plan, the average family at every income level gets a tax cut,” Ryan said.

Studies have shown that many of the tax bill’s benefits would go to the highest earners -- and some middle-class taxpayers might actually pay more.

Ryan celebrated the vote total. “Getting 227 members to agree on something as complicated as the tax code is extraordinary,” he said.

Conservatives lauded Thursday’s vote -- a crucial step toward a much-needed win for Republicans after almost a year of unified government with no major legislative victories. The bill’s backers say its cuts would spur enough economic growth to offset the measure’s $1.4 trillion cost, as estimated by Congress’s Joint Committee on Taxation. The JCT hasn’t yet released cost estimates that would account for macroeconomic changes.

Focus now turns to the Senate, where Republican leaders will face tougher hurdles -- both political and fiscal.

Republicans control only 52 of the chamber’s 100 seats and must produce legislation that meets far stricter fiscal constraints. The Senate Finance Committee is already proposing measures that would make benefits for individuals -- including the middle class -- temporary as leaders try to avoid adding to deficits beyond a 10-year budget window.

Senate Majority Leader Mitch McConnell praised the House vote and said Senate tax writers “are also making real progress on a bill that’s been years in the making to fulfill our promise to the American people.”

The Senate plan departs from the House bill by delaying the corporate tax-rate cut by one year. It also includes a proposal to repeal a key provision of the Obamacare law -- saving the government $318 billion over 10 years to help pay for the tax cuts, but leaving 13 million Americans uninsured by 2027, according to official estimates.

Many of the Senate provisions are designed to cut the bill’s cost and meet budget rules that will allow GOP leaders to pass a bill with only Republican votes. Differences between the House and Senate legislation will have to be worked out between the chambers -- and then both the House and Senate will have to approve the final result.

House Ways and Means Chairman Kevin Brady, who shepherded the bill through the House, said lawmakers will persevere. “This is certainly not the last step in our tax reform journey,” he said after the vote. But he pledged lawmakers will “make this better every step of the way.”

Instant Insights /

House passes tax bill in first step toward historic overhaul

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