Changes to the Senate GOP’s tax plan include a proposal to reduce many taxes on individuals only temporarily but permanently chop the corporate rate.
The tweaks by Senate Finance Committee Chairman Orrin Hatch, R-Utah, on Tuesday largely move to make the bill comply with Senate budget rules.
Even before the revisions were finalized, the panel’s ranking member Sen. Ron Wyden, D-Ore., slammed the plan for disproportionately helping businesses and wealthy taxpayers. He contended this week that the GOP abandoned middle-class tax relief for “a massive handout to multinational corporations.”
Hatch’s changes that were unveiled Tuesday night aim to decrease the burden on middle-class taxpayers and win over two skeptical GOP senators by proposing to increase the child tax credit to $ 2,000 from $ 1,000 per child. A previous version of the plan called for a $ 1,650 credit.
Major analyses so far have estimated that versions of the Senate bill would cut the tax burden on most Americans. However, millions of middle-income people could end up seeing a tax increase, due to the plan’s elimination of provisions like state and local tax deductions.
Here are the notable changes in Hatch’s revision:
- The amended bill would slightly cut individual tax rates for multiple brackets and set seven rates: 10 percent, 12 percent, 22 percent, 24 percent, 32 percent, 35 percent and 38.5 percent. Those changes, as well as the near doubling of the standard deduction, would expire after 2025. The reduced corporate tax rate, down to 20 percent from 35 percent, would be permanent.
- The child tax credit would rise from $ 1,000 to $ 2,000. It would start to phase out at $ 500,000 in household income. The change would also sunset after 2025.
- As expected, the plan would effectively repeal the Obamacare individual mandate, which requires most Americans to have health insurance or pay a penalty. Senators say doing so will save more than $ 300 billion to give Republicans more budget flexibility. The Congressional Budget Office has estimated that it will lead to 13 million more people uninsured by 2027 and increase average Obamacare premiums.
- The Senate plan would expand proposed tax breaks for pass-through businesses. Those would also expire after 2025.
- It also gets rid of a provision that would have taxed company stock options when they vest. Silicon Valley had opposed that measure, saying it would suffocate entrepreneurial efforts.
The Senate is marking up, or debating and amending, its tax bill this week. Senate Republicans hope to pass the plan during the week after Thanksgiving.
The House aims to approve its separate tax bill on Thursday. The chambers would then have to hash out a joint plan.