The budget calls for replacing the current progressive tax rate structure with two brackets, dramatically lowering the top rate from 39.6 to 25 percent, and constituting a massive tax cut for high income earners. Though the budget's overall tax reforms are intended to be revenue neutral, the document is silent on how Congress would recoup the lost revenue. Republicans have called for limiting or eliminating tax expenditures to fill that budget hole, but outside experts say the rate cuts are so large that the distributional consequences of the overall reforms would likely amount to an effective tax increase on middle income earners.
Thursday's vote comes just as the Senate is kicking off its own budget debate, which will culminate in an unlimited amendment process called votearama.
The Senate Democratic budget calls for increasing taxes by $975 billion, via curbing tax expenditures, and cutting spending by $975 billion. The savings would be used both to turn off sequestration, to reduce the deficit, and to finance a modest, near-term jobs program.
If both budgets pass, House and Senate members could theoretically combine them into one. But the differences between the two documents are so vast that it will be extraordinarily difficult for the parties to reconcile them.