Senate Tax Plan Diverges From House Version, Highlighting Political Pressures<br />It would keep the bottom tax bracket for individuals at 10 percent, which the House had raised to 12 percent,<br />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.<br />“I remain concerned over how the current tax reform proposals will grow the already staggering national debt,” Mr.<br />Flake said, “by opting for short-term fixes while ignoring long-term problems for taxpayers and the economy.”<br />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,<br />and would now be available to families making up to $1 million a year, a leap from a current income limit of $110,000.<br />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<br />and on middle-class small-business owners who would not have benefited from the House’s original lower pass-through rate.<br />The Senate bill differs significantly from the House version approved by the Ways<br />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.<br />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<br />that Republicans are counting on to blunt the cost of the tax cuts.
