Republicans’ tax overhaul appears to be heading for approval in Congress next week, after GOP senators who were previously holdouts on the bill said they’d vote for the sweeping measure that would cut corporate and individual rates.
Released late Friday afternoon, the bill would retain seven individual tax brackets; lower the corporate rate to 21% from 35%; and double the child tax credit to $2,000. The refundable portion of the child credit would be $1,400 — up from $1,100 in the Senate-passed bill. That expansion persuaded Sen. Marco Rubio, a Florida Republican, to back the new bill, buoying chances for passage.
The bill also takes an axe to Obamacare, repealing its mandate for individuals to have health insurance or pay a fine. It doubles the exemption for the estate tax, commonly called the death tax by critics.
House and Senate Republicans are planning to vote on the package next week. President Donald Trump told reporters Friday morning: “I think that we are going to be in a position to pass something as early as next week, which will be monumental.” Republicans control the Senate 52-48 and can only afford to lose two votes on the bill and still pass it.
Under Senate rules, the bill can add no more than $1.5 trillion to deficits over 10 years. In another positive sign for GOP leaders, Sen. Bob Corker, a Tennessee Republican who voted against the Senate version of the bill, announced he will vote “yes” on the final product. Yet the bill’s price tag is unlikely to differ much from previous versions.
Democrats have criticized Republicans’ tax plans as a giveaway to the wealthy and corporations. The bill unveiled Friday would cut the top individual tax rate to 37% from 39.6%. Here are the individual tax rates.
|For joint filers|
|10%||$0 to $19,050|
|12%||$19,050 to $77,400|
|22%||$77,400 to $165,000|
|24%||$165,000 to $315,000|
|32%||$315,000 to $400,000|
|35%||$400,000 to $600,000|
|37%||$600,000 and above|
|For single filers|
|10%||$0 to $9,525|
|12%||$9,525 to $38,700|
|22%||$38,700 to $82,500|
|24%||$82,500 to $157,500|
|32%||$157,500 to $200,000|
|35%||$200,000 to $500,000|
|37%||$500,000 and above|
The new corporate rate would go into effect next year. Earlier this week, Trump said he’d be “thrilled” with a 21% rate after earlier seeking a rate of 20%. The corporate alternative minimum tax is repealed in the bill.
Individuals would be able to deduct up to $10,000 in state and local taxes, split between property taxes and income/sales taxes.