Republicans to propose keeping 39.6% top tax income bracket

WASHINGTON—House Republican leaders are expected to unveil a tax proposal as soon as today that would maintain the 39.6 percent top personal income tax rate for wealthy individuals, amid criticism that their original plan was too friendly to the rich.

That’s according to two people familiar with the plan who spoke on condition of anonymity in advance of the public release of the GOP bill. Under the plan being discussed, the top rate would apply to higher incomes, perhaps around $800,000 to $1 million, one of the people said. That person cautioned details remain in flux.

The plan originally unveiled by President Donald Trump and congressional Republicans called for shrinking the number of tax brackets from seven to three, with respective tax rates of 12 percent, 25 percent, 35 percent. That plan drew immediate criticism from Democrats, who complained it was too favorable to the wealthy and undermined Trump’s rhetoric about it benefiting the middle class.

Republicans also plan to announce that they intend to reduce the corporate tax rate to 20 percent right away, erasing the recent chatter about phasing in the cut, according to a congressional official.

Trump and congressional Republicans are seeking the first major tax overhaul in three decades, eager for a significant legislative achievement after being stymied in their attempts to repeal the Obama-era health care law. Enacting a tax package is seen as critical to helping Republicans maintain their majorities in the 2018 elections.

A day before the big reveal, Trump intensified his lobbying for the tax overhaul plan whose shape was still under negotiation by congressional Republicans. The president predicted a grand signing ceremony before Christmas at “the biggest tax event in the history of our country.”