LOWER TAXES FOR TOP 1% OFFSHORE TAX BREAK BANKS AVOID A HIT BENEFIT FOR CAR DEALERS ALTERNATIVE MINIMUM TAX CONFUSION HITS FOR LOW-INCOME EARNERS

The richest taxpayers will be taxed at a rate of about 29.6% on such income, a big cut from the current top federal income tax rate of 39.6. That expansion would cost the government$114 billion more than an earlier version of the proposal. A provision to give multinational companies like Pfizer, Google and Apple a tax break on the profits theyhave accumulated in offshore taxhavens was made less generous than earlier versions of the proposal. But the companies would still bring those earnings home at rates of 7.5 to 14.5% — and the new corporate income tax rate, which the bill would cut nearly in half to 20%. Banks and other financial institutions will still be able to avoid taxes bymaking payments to offshore subsidiaries. The banks got a last-minute reprieve for some transactions. The bill excludes payments related to derivatives, a big source of income for financial institutions. Some last-minute changes were smaller and more peculiar: The federal tax code includes limits on howmuch interestcompanies can deduct from their taxes. But the bill now excludes from those restrictions interest paid by car dealerships. The bill extends so-called bonus depreciation — the ability to take big deductions related to certain corporate investments — at a cost of $34 billion, but pays for it by reinstating the corporate alternative minimum tax. The last-minute decision to scrap the repeal of the corporate alternative minimum tax left lawyers and accountants scratching their heads about the ultimate impact. The Senate moved to tighten deductions for lower- and middleincome wage earners. The Bill, for example, prohibits employers from rewarding employees with gift cards so that a reward of, say, $25 or $50 in the form of a giftcard doesn’tescape being taxed.