Senate Tax Plan Diverges From House Version, Highlighting Political Pressures
It would keep the bottom tax bracket for individuals at 10 percent, which the House had raised to 12 percent,
and would reduce the top rate for high earners to 38.5 percent, down from the current rate of 39.6 percent, which the House had maintained.
“I remain concerned over how the current tax reform proposals will grow the already staggering national debt,” Mr.
Flake said, “by opting for short-term fixes while ignoring long-term problems for taxpayers and the economy.”
Senators Mike Lee, Republican of Utah, and Marco Rubio, Republican of Florida, said the bill did not go far enough in increasing the child tax credit, which rose to $1,650 per child in the Senate version, from $1,600 in the House bill,
and would now be available to families making up to $1 million a year, a leap from a current income limit of $110,000.
Instead, the Senate would create a 17.4 percent deduction on income taxes for pass-through owners of all income levels, effectively cutting rates both on rich owners
and on middle-class small-business owners who would not have benefited from the House’s original lower pass-through rate.
The Senate bill differs significantly from the House version approved by the Ways
and Means committee on Thursday: It would preserve some popular tax breaks, including ones for mortgage interest and medical expenses, and would maintain a bottom tax rate of 10 percent for lower earners.
But it would also jettison the state and local tax deduction entirely and delay the enforcement of a 20 percent corporate tax rate until 2019, which could rankle the White House and mute the economic growth projections
that Republicans are counting on to blunt the cost of the tax cuts.