House GOP tweaks final tax bill
House Republicans are keeping the adoption tax credit and changing a provision on small businesses to shore up support for the bill, according to a new amendment released by Ways and Means Chairman Kevin Brady.
Why it matters: Brady is changing parts of the bill that had faced the strongest opposition from other Republicans.
What the new manager's amendment to the tax bill does:
- Creates a new 9 percent tax rate — rather than the normal 12 percent rate — for the first $75,000 in income of businesses making less than $150,000 through a pass-through business. The rate is reduced for businesses making between $150,000 and $225,000, where it phases out. The lower rate is phased in over five years.
- Keeps the adoption tax credit, which the original tax bill repealed.
- Allows families with disabled children to move extra assets from a tax-advantaged savings account into an ABLE account.
- Makes clear that military families will be allowed to deduct moving expenses.
- Reduces corporate tax rate by lowering 80-percent dividends received deduction to 65 percent. Lowers the 70-percent dividends received deduction to 50 percent.
- Gives an exclusion to the limit on deductibility of business interest for taxpayers who paid or accrued interest on "floor plan financing indebtedness."
- Increases repatriation rate on foreign income to a 7 percent rate for illiquid assets (up from 5 percent) an 14 percent on liquid assets (up from 12 percent).