Republicans unveil final version of sweeping tax overhaul
WASHINGTON– Republicans unveiled their final tax bill Friday evening, a step that will place them on track to vote on their plan next week and potentially have President Donald Trump sign it into law by the end of the year.
It’s a campaign promise that Republicans are optimistic they’ll finally be able to deliver on, bolstered in part by several key senators saying they’ll back the bill Friday before the bill’s public release.
“I’m confident we’ll have the votes,” said Sen. Rob Portman, a Republican from Ohio and a member of the tax conference.
The bill — which critics say is heavily weighted to ease the tax burden of businesses rather than the middle class — drops the corporate tax rate down from 35% to 21%, repeals the corporate alternative minimum tax, doubles the standard deduction for individuals and restructures the way pass-through businesses are taxed.
The bill keeps seven personal income tax brackets, and lowers that rate for most brackets, including dropping the wealthiest tax rate to 37% from 39.6%.
The child tax credit under the bill will be $2,000 and the credit is refundable up to $1,400. After months of negotiations in both chambers, a narrow vote in the US Senate and this last-minute tweak to the child tax credit aimed to win back the support of Florida Sen. Marco Rubio, Republicans were upbeat Friday afternoon as they briefed reporters on where the bill stood.
While Republican leaders released a two-page summary of the bill’s contents, the summary did include specific details on how the plan is funded.
The conference report will also allow individuals to deduct up to $10,000 in state and local taxes. Individuals can either elect to deduct up to $10,000 in state and local income and property taxes or state and local property and sales taxes. Originally, Republicans had tried to repeal the state and local deductions altogether, but pushback in the House and Senate forced leaders to retain the property tax deduction. Then, the conference report went even further and made concessions in order to win over Republicans in the House from high-tax states like New Jersey, New York and California.
“I’m confident at the end of the day, the Senate will approve this conference committee report,” House Ways and Means Chairman Kevin Brady said.
Just hours before the bill was released, Rubio tweeted that he was happy with the direction the bill settled in and a source close to Rubio told CNN that the eleventh-hour high-wire act had worked and Rubio was planning to support the bill.
“For far too long, Washington has ignored and left behind the American working class. Increasing the refundability of the Child Tax Credit from 55% to 70% is a solid step toward broader reforms which are both Pro-Growth and Pro-Worker,” Rubio tweeted.
In addition, Sen. Bob Corker, who initially voted against the GOP tax plan when it first past the Senate, said Friday afternoon he would support the plan.
Key questions remained, however, about how exactly the tax bill and the new, more generous, child tax credit would be paid for. Under Senate rules, the Senate’s tax bill cannot cost more than $1.5 trillion. The bill also cannot add to the deficit outside the 10-year window. Already, Republicans were expected to repeal the individual mandate — a key part of the Affordable Care Act — to help finance the bill. And, Republicans had agreed to settle on a slightly higher corporate tax rate than their originally desired 20% rate. The Senate bill also sunset the individual tax cuts after just a few years, but lawmakers wouldn’t say if the individual tax breaks could potentially sunset even sooner in the final bill.