Republicans Reach Last-Minute Deal to Give Wealthy Americans an Even Bigger Tax Cut

The new agreement would cut the top income tax rate from 39.6 percent to 37 percent.

White House/Planet Pix/ZUMA

Facts matter: Sign up for the free Mother Jones Daily newsletter. Support our nonprofit reporting. Subscribe to our print magazine.

On Wednesday, House and Senate Republicans reached a deal on the tax bill, which they plan to vote on next week. The GOP came to a deal by bolstering the bill’s main goal: tax cuts for the rich. The new agreement would cut the top income tax rate from 39.6 percent to 37 percent. The corporate tax rate would fall from 35 percent to 21 percent, instead of the 20 percent rate passed by the House and Senate.

Taxpayers have to make at least $418,000 per year to be in the top income tax bracket today. The bill passed by the House kept the top tax rate at 39.6 percent, while the Senate bill cut it to 38.5 percent. Republicans decided to give top-earners a bigger tax cut because the tax bills cap the deduction for state and local taxes at $10,000, the Wall Street Journal reports.

Senate Minority Leader Leader Chuck Schumer (D-N.Y.) said Wednesday morning that the concern with limiting state and local tax deductions should be about how it would lead to tax hikes for some middle-class taxpayers. He added that it “makes no sense” to respond to that concern by giving the wealthiest Americans a larger tax cut.

Schumer also called on Senate Majority Leader Mitch McConnell (R-Ky.) to delay votes on the tax bill until incoming Alabama Sen. Doug Jones is seated next year. In a bad sign for Democrats, Sen. Susan Collins (R-Maine) said Jones’ upset victory should not change the timing of the tax vote. Collins voted for the Senate bill, but is still seen as a possible, if unlikely, swing vote. McConnell can only afford to lose one vote on the tax bill if Sen. Bob Corker (R-Tenn.) maintains his opposition to the bill. If Jones is seated, Republicans would have no votes to spare.

 

REAL QUICK, REAL URGENT

Minority rule, corruption, disinformation, attacks on those who dare tell the truth: There is a direct line from what's happening in Russia and Ukraine to what's happening here at home. And that's what MoJo's Monika Bauerlein writes about in "Their Fight Is Our Fight" to unpack the information war we find ourselves in and share a few examples to show why the power of independent, reader-supported journalism is such a threat to authoritarians.

Corrupt leaders the world over can (and will) try to shut down the truth, but when the truth has millions of people on its side, you can't keep it down for good. And there's no more powerful or urgent argument for your support of Mother Jones' journalism right now than that. We need to raise about $450,000 to hit our online fundraising budget in these next few months, so please read more from Monika and pitch in if you can.

payment methods

REAL QUICK, REAL URGENT

Minority rule, corruption, disinformation, attacks on those who dare tell the truth: There is a direct line from what's happening in Russia and Ukraine to what's happening here at home. And that's what MoJo's Monika Bauerlein writes about in "Their Fight Is Our Fight" to unpack the information war we find ourselves in and share a few examples to show why the power of independent, reader-supported journalism is such a threat to authoritarians.

Corrupt leaders the world over can (and will) try to shut down the truth, but when the truth has millions of people on its side, you can't keep it down for good. And there's no more powerful or urgent argument for your support of Mother Jones' journalism right now than that. We need to raise about $450,000 to hit our online fundraising budget in these next few months, so please read more from Monika and pitch in if you can.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate