House Republicans just made some enormous last minute changes to their tax bill - here's what they mean
- The House Ways and Means committee is wrapping up consideration of the Tax Cuts and Jobs Act.
- To meet a key requirement, Republicans introduced a slew of changes via what's known as a manager's amendment.
As the debate over the massive GOP tax bill winds down in the House Ways and Means Committee, its chairman added last-minute adjustments to the Tax Cuts and Jobs Act that could have wide-ranging effects.
Rep. Kevin Brady offered what's known as a manager's amendment on Thursday . The amendment contains a mound of edits added at the end of the committee's debate, designed to limit changes following the amendment's passage.The manager's amendment is key for Republicans - prior to the changes, the bill went over its allotment for projected additions to the deficit . Since the bill is being considered under the budget reconciliation process, it can only add $1.5 trillion to the federal deficit over the next 10 years.
Here is a quick rundown of the biggest changes in the amendment and what they could mean:
Adjustments to the tax rates for owners of pass-through businesses:
The amendment would lower the marginal tax rate on income attributable to the owner of a pass-through entity, such as a limited-liability corporation or S-corporation.
- The rate would be 9% on the first $75,000 on business income, down from the current 12% rate, as long as the person makes under $150,000 total.
- After $225,000 of income, there would be a "bubble tax" to reclaim the new lower rate.
- The new lower rate would be phased in over five years, dropping every two years until it hits 9% in 2022.
- Reinstitutes the adoption tax credit: The proposed repeal of the adoption credit was the subject of intense debate, and the new amendment would keep the credit in the tax code.
- Requires a Social Security number to claim a child tax credit: This would be an attempt to crack down on unauthorized immigrants obtaining such a credit, which would be increased to $1,600 a child from $1,000.
The bill is expected to be passed by the Republican-controlled committee sometime Thursday afternoon.