Senate and House Republicans have struck an agreement on a major tax bill.
Senate and House Republicans have struck an agreement on a historic tax-cut bill. Senate Republican leaders shared the details of the revamped bill with members of their conference at lunch on Wednesday.
The bill changes the corporate tax rate from 35% to 21%. This is a slight increase from the favored 20% rate.
“We don’t like it; it causes some consternation. I am concerned about the business rate,” said Rep. Mark Walker (R-N.C.), chairman of the conservative 155-member Republican Study Committee. “When these business communities are looking to build, every percentage point is a major factor in this, so we want to be careful in going in that direction.”
Negotiators are still working on how many tax brackets to set, said congressional aides. Republican senators said they expected the final bill to tilt toward the seven brackets they passed in their version.
The deduction for pass-through companies will be set at 20 percent, somewhat lower than the 23 percent included in the Senate-passed bill. However, the top individual income rate will be lowered to 37 percent from its current level of 39.6 percent.
Sen. Ron Johnson (R-Wis.) said the pass-through rate will include trusts and establish an effective top tax rate of 29.6 percent.
The corporate alternative minimum tax has been stripped out. In addition, the new bill also doubles the exemption of the estate tax.
“While everyone would have preferred the 20% corporate rate that was contained in both the House and Senate versions of the bills and complete elimination of the death tax/estate tax, as well as some language grandfathering interest deductions on business debt, we understand this historic bill requires negotiation to become law and we are pleased with the fact a very good bill is moving forward,” said Ray McCarty, president of Associated Industries of Missouri.