Senate Republicans Increase Proposed Deduction for Pass-Through Businesses

The measure is part of the tax rewrite proposal.

November 30, 2017

WASHINGTON – Yesterday, Senate Republicans indicated that the proposed deduction for pass-through businesses has been increased, Politico reports. The deduction is part of the tax rewrite measure.

After lawmakers complained that the bill wouldn’t slash taxes enough for small businesses, two senators agreed to up the deduction to 20%, from the previously proposed maximum of 17.4%. Sen. Steve Daines (R-MT), one of the complaining lawmakers, now said he would approve the tax plan.

Meanwhile, Sen. Mike Rounds (R-SD) said the additional percentage would be found within the tax plan because “we had some room.” Republicans have $600 billion in play to address colleague concerns before hitting the budget’s $1.5 trillion limit on the total amount of a tax cut. Having a higher pass-through deduction will probably push the plan more towards wealthier Americans because pass-through income generally impacts the well off more than any other income bracket.

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