GOP said to be forsaking tax cuts for top earners

WASHINGTON — White House and GOP leaders are preparing major changes to coming tax legislation, including scaling back plans for large- scale tax cuts for the top earners, as Republicans seek to win support from Democrats in Congress, three people briefed on the discussions said.

The White House is considering, among other things, keeping the top tax rate for individuals at 39.6 percent, decreasing the benefits top earners would see in the tax package by scrapping an earlier proposal that would have cut that rate to 35 percent.

White House negotiators are also considering giving up on a push to repeal the estate tax, which is levied on individuals who die with more than $ 5.49 million in their estate. Republicans have long called for repealing the estate tax, but Democrats have raised objections, saying repeal would only benefit the wealthy and would add to the federal debt.

The White House and GOP leaders are still debating how to proceed, and they could end up proposing changes to both the top tax rate and the estate tax, according to the three people. The people spoke on condition of anonymity because they were not authorized to speak publicly about the party’s internal deliberations.

The White House and GOP leaders remain fully committed to reducing the corporate tax rate and delivering tax cuts for the middle class, the people said.

The fluidity of the discussions illustrates how President Donald Trump has sought to reframe the tax discussions as a way to help businesses and the middle class and not the wealthiest Americans.

In April, the White House put out a one- page blueprint of its tax plan that would have repealed the estate tax, eliminated the alternative minimum tax and cut the top individual tax rate from 39.6 to 35 percent. These changes and others would serve as a windfall for the wealthiest Americans, budget experts found.

Senior White House officials for months defended the calls for tax cuts that would benefit the top earners, saying they are necessary to help people invest in the economy and hire more workers. But Trump last week stated the tax plan would not — on net — reduce the taxes for high- earning Americans, and he predicted that some could even pay more.

Americans pay income taxes on a tiered system, and there are seven tiers. Upperincome Americans pay a 39.6 percent rate on all income above $ 418,400.

The White House had proposed collapsing these seven brackets into three brackets, with the new top bracket sitting at 35 percent. If White House officials decide to keep the top bracket at 39.6 percent and create two new brackets, they could still give everyone a tax cut but lessen the size of that cut for top earners.

The White House and GOP leaders next week are planning to provide more details of their tax push.

Late Tuesday, Senate Republicans said they are zeroing in on a tax outline that would add about $ 1.5 trillion to the government’s $ 20 trillion debt over 10 years. Sen. Bob Corker of Tennessee, a member of the chamber’s band of deficit hawks, and Sen. Pat Toomey, R- Pa., one of the chamber’s more ardent believers that tax cuts can pay for themselves, said they sealed an agreement on Tuesday.

The $ 1.5 trillion figure, confirmed by congressional officials familiar with the agreement, would allow deeper cuts to tax rates than would be allowed if Republicans followed through on earlier promises that their coming tax overhaul wouldn’t add to the deficit.